Economy
NIN/BVN for Tier-1 Accounts, Imperative to Combat Fraudulent Activities
When the Central Bank of Nigeria (CBN) in December 2023, mandated the linkage of Bank Verification Numbers (BVN) and National Identification Numbers (NIN) across all tiers of accounts in Nigeria, this brought a wave of panic amongst customers who had run their accounts without BVN or NIN.
The apex bank in a circular, signed by the Director of Payment System Management Department at the CBN, Mr Chibuzo Efobi and the Director of Financial Policy and Regulations Department, Mr Haruna Mustapha, to all commercial, merchant, non-interest and payment service banks, other financial institutions and mobile money operators, stated that all individual existing and new tier 1, 2 and 3 accounts/wallets must have BVN or NIN.
Mustapha noted that the mandate was part of the apex bank’s effort in promoting financial system stability which has led to its amendment of Section 1.5.3 of the Regulatory Framework for BVN Operations and Watch-List for the Nigerian Banking Industry (Guidelines).
The CBN’s circular also specified that existing unfunded individual Tier 1 accounts without BVN or NIN would be placed on “Post No Debit or Credit” immediately.
“For all existing Tier 1 accounts/wallets without BVN or NIN: Effective immediately, any unfunded account/wallet shall be placed on ‘Post No Debit or Credit’ until the new process is satisfied.
Effective March 1, 2024, all funded accounts or wallets shall be placed on ‘Post No Debit or Credit’ and no further transactions permitted. The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024”, the circular read.
It further said that to ensure uniform and full compliance, the executive compliance officers, chief compliance officers or heads of the compliance functions are advised to acquaint themselves with the attached guidance notes which become applicable to all institutions regulated by the CBN.
Sources noted that the matter was being treated as a “national security issue”, adding that banks caught operating accounts without BVN or NIN after the expiration of the deadline “shall be severely dealt with”.
Investigations further reveal that Nigerians have begun to besiege commercial banks and the National Identity Management offices as a result of the directive.
A look into the legal framework underpinning the policy indicates that the National Identity Management Commission (NIMC) Act 2007 established the NIMC and mandated the creation of a National Identity Database (NID) containing unique NINs assigned to Nigerian citizens and legal residents.
The Mandatory Use of the National Identification Number Regulation, 2017, further stipulates that NINs be used for various transactions, including employment, access to social intervention programs, and opening bank accounts whereas the CBN’s policy builds upon this existing legal framework, aiming to enhance financial security and inclusion by mandating the inclusion of identity documentation across all segments of the banking system.
However, industry records reveal that NIMC has registered just over 100 million Nigerians whilst the latest data from the Nigeria Inter-Bank Settlement System (NIBSS) as of October 9, 2023, revealed that there were 59 million (58,999,262) accounts with BVN. It is there expected that the regularisation of accounts without BVN or NIN can be achieved within the deadline given the progress that’s already been recorded on both fronts.
Looking deeper into this development, this policy provides a big boost in reducing identity theft, and fraudulent activities and prevents unauthorised access to an individual’s account.
Battle against money laundering
At the Financial Action Task Force plenary held late October in Paris, France, Nigeria failed to scale a review of Money Laundering and Terrorism Financing Risk conducted by the global financial intelligence agency.
The global agency faulted Nigeria’s anti-money laundering war, which had landed the country on the international grey list in February alongside South Africa, and 20 other countries.
Although the Nigerian Financial Intelligence Unit said it had been working to meet the FATF recommendations on money laundering and terrorism financing, it did not scale the review carried out by the FATF at its last plenary.
Countries on the FATF grey list have been identified as having strategic deficiencies in their anti-money laundering, terrorist financing, and proliferation financing regimes. According to KPMG, the implications for the greylisting of two of the biggest economies in Africa may be far-reaching.
Concerning Nigeria, KPMG said that “FATF noted that although Nigeria had made some progress since the adoption of its Mutual Evaluation Report in August 2021 it is required to implement FATF’s action plans. This FATF greylisting adds another layer of risk and complexity to businesses that already perceive Nigeria as a high-risk country for anti-corruption and other financial crime risks. This may put businesses with connections to Nigeria under more regulatory scrutiny, as regulators may expect them to implement more stringent AML/CFT compliance measures to mitigate the risks associated with greylisting.”
Also, the greylisting may result in higher compliance costs and increased due diligence requirements for businesses, making transactions with Nigerian counterparties more difficult. A key component of the anti-money laundering requirement of FATF is Know Your Customer (KYC), which helps financial institutions verify the identity of new and existing customers.
Hence, this directive by the CBN is a tool to get Nigeria off the grey list and strengthen its battle against money laundering in Nigeria.
Enhancing financial inclusion and financial security
So far, Nigeria has brought more of its citizens into the financial system but remains far from its goal of getting 95 per cent of the population fully banked this year 2024. According to EFInA, a UK government-backed firm, the percentage of adult Nigerians with formal financial services- including bank accounts, insurance and mobile money- rose to 64 per cent in 2023 from 56 per cent recorded in 2020. But just about 52 per cent have a bank account and more comprehensive adoption is hampered by widespread poverty in the country. This directive offers a much broader sense of increasing the number of financially included people especially if it is very much strictly implemented. Once this is achieved, scammers who previously relied on stolen information to conduct fraudulent transactions will face a bigger challenge.
Boost economic growth and improve revenue generation
Apart from prevention and financial inclusion, this directive is expected to unlock new markets, drive entrepreneurship, and boost the creation of jobs. Similarly, with an accurate identification technique, tax evasion by individuals and companies becomes significantly harder. This can lead to increased government revenue and improved public services, benefiting all Nigerians.
Conclusion
The truth is that very few policies go through successful implementation in Nigeria, the onus is now on the CBN to revolutionize the country’s financial sector through financial security, empowering Nigerians, and stimulating economic growth through its latest directive. Although January 31, 2024, looks like a long period, the CBN & NIMC should do everything humanly possible to adeptly navigate potential pitfalls, unlocking the brighter future promised by this ambitious initiative.
By Aduragbemi Omiyale
Stanbic IBTC Nominees Limited has been commended for its critical role in the Nigerian capital market, especially for safely keeping non-pension assets.
For the past 30 years, the company has provided custody services in Nigeria, and to celebrate this milestone, it was honoured with a closing gong ceremony at the Nigerian Exchange (NGX) Limited.
The milestone reflects the institution’s longstanding contribution to investor confidence and the continued development of the nation’s capital market.
Welcoming the organisation to Customs Street, the chief executive of NGX, Mr Jude Chiemeka, commended its three decades of custody services, recognising the firm’s role in strengthening investor confidence and enhancing market safety.
He highlighted NGX’s continued investment in technology, which he said has enabled over 2.6 million active retail investors to trade on the platform.
“Technology continues to be at the heart of our strategy,” Mr Chiemeka said, noting that a vibrant and secure marketplace remains essential to investor participation.
In his remarks, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, thanked NGX for its continued partnership, saying, “We are thrilled to be here today, commemorating not just our journey, but also the remarkable progress made by the NGX.”
He noted that the collaboration between the two institutions has continued to drive innovation, product development and thought leadership across the industry.
“We are dedicated to raising standards within the industry as part of Standard Bank Group. Our focus remains driving the growth and development of Nigeria’s capital market. Indeed, Nigeria is our home, and we drive her growth,” he added.
The chief executive of Stanbic IBTC Nominees, Mr Babatunde Majiyagbe, reflected on the evolution of the business from the era of physical share certificates stored in fireproof vaults to today’s fully dematerialised market, where securities are held electronically.
“We started with holding custody of physical certificates, investing in vaults with fire and dust protection, so those certificates could be presented when needed,” Mr Majiyagbe recalled, noting that while the market has evolved significantly, the commitment to service excellence has remained unchanged.
“What has endeared a lot of investors to the market is that they are dealing with a reputable organisation like ours. We are high on good governance, and high on technology, making the process of investment in Nigeria easier,” he said.
Mr Majiyagbe added that Stanbic IBTC Nominees’ role goes beyond just attracting foreign portfolio investment (FPI) and capital.
“For us, it’s not just about FPI; but also about the value we have delivered over 30 years. Stanbic IBTC Nominees continue to be the eyes and ears of foreign and domestic investors in our market,” he stated.
Mr Majiyagbe added that the firm has also supported the development of market rules and safeguards, noting: “We have, over the years, advocated for growth, change, transformation and stability in our capability to provide services to domestic and foreign portfolio investors continuously.”
The deputy chief executive of Stanbic IBTC Bank and Chairman of Stanbic IBTC Nominees, Mrs Bunmi Dayo-Olagunju, said the next phase of growth will build on the institution’s legacy of trust.
“For 30 years, we’ve delivered growth, security, and client confidence. That’s why investors have stayed with us and why new business keeps coming.
“Our target for this new phase of growth is simple: build on that trust and ride the acceleration in Nigeria’s economic activity.
“With custody, settlement, capital raise, and advisory integrated on one platform, we’re not just a custodian. We’re an infrastructure. We look forward to building on that trust for generations to come, serving both local and international clients. Hopefully, we’ll have another 100 years of maintaining that trust with local and international markets,” Mrs Dayo-Olagunju said.
By Dipo Olowookere
The positive market breadth index recorded by the Nigerian Exchange (NGX) Limited could not save it from further claws of the bears on Friday.
The major performance indicators, the All-Share Index (ASI) and the market capitalisation, depreciated by 0.03 per cent and 0.01 per cent, respectively.
The ASI was down by 78.58 points to 245,283.68 points from the previous day’s 245,362.26 points, and the market capitalisation receded by N14 billion to N158.326 trillion from Thursday’s N158.340 trillion.
Business Post reports that market participants traded 943.0 million equities valued at N46.7 billion in 55,480 deals compared with the 2.1 billion equities worth N230.8 billion transacted in 48,231 deals a day earlier.
This implied that the trading volume shrank by 55.10 per cent, the trading value reduced by 79.77 per cent, and the number of deals surged by 15.03 per cent.
An analysis of the sectoral performance showed that the consumer goods space crashed by 0.60 per cent and the energy index went down by 0.09 per cent.
However, the banking sector improved by 1.90 per cent, the insurance counter expanded by 0.75 per cent, and the industrial goods segment soared by 0.10 per cent.
There were 33 appreciating stocks and 29 depreciating stocks during the last trading session of the week and month of July, indicating bullish investor sentiment despite the poor outcome.
CAP lost 9.97 per cent to trade at N128.25, Veritas Kapital depreciated by 9.49 per cent to N1.43, Vitafoam Nigeria slipped by 7.70 per cent to N179.80, The Initiates dipped by 6.67 per cent to N28.00, and NAHCO crashed by 6.63 per cent to N155.00.
Conversely, Eterna gained 10.00 per cent to sell for N33.00, Consolidated Hallmark also grew by 10.00 per cent to N8.36, McNichols expanded by 9.52 per cent to N5.75, Honeywell Flour increased by 8.96 per cent to N18.25, and First Holdco chalked up 8.00 per cent to quote at N129.55.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its bullish run on Friday, July 31, by 0.99 per cent.
This raised the NASD Security Index (NSI) by 43.54 points to 4,431.71 points from 4,388.17 points, and lifted the market capitalisation by N26.13 billion to N2.659 trillion from N2.633 trillion.
The growth came amid a significant decline in the activity level, as the volume of securities decreased by 73.0 per cent to 690,990 units from 2.6 million units, the value of securities slid by 15.0 per cent to N75.0 million from the preceding session’s N88.3 million, and the number of deals contracted by 31.6 per cent to 26 deals from the 38 deals recorded a day earlier.
The most active stock by value on a year-to-date basis remained Great Nigeria Insurance (GNI) Plc, with a turnover of 3.4 billion units valued at N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.6 million units exchanged for N5.5 billion.
The most active stock by volume on a year-to-date basis was also GNI Plc, with the sale of 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
Investor sentiment was bullish yesterday after a positive market breadth index triggered by five price gainers and two price losers, led by 11 Plc, which gave up N14.99 to close at N225.01 per share versus the previous day’s N240.00 per share, and MRS Oil Plc, which shed N14.55 to settle at N132.00 per unit versus N146.55 per unit.
However, Nipco Plc gained N41.50 to sell at N456.50 per share compared with the preceding session’s N415.00 per share, FrieslandCampina Wamco Nigeria Plc appreciated by N12.93 to N147.93 per unit from N135.00 per unit, Nitrox Industrial Gases Plc improved by N1.00 to N20.00 per share from N19.00 per share, CSCS Plc soared by 54 Kobo to N102.00 per unit from N101.46 per unit, and Industrial and General Insurance (IGI) Plc jumped by 1 Kobo to 50 Kobo per share from 49 Kobo per share.
