In a significant move to reinforce financial system stability and enhance Know Your Customer (KYC) protocols, the Central Bank of Nigeria (CBN) has announced plans to freeze accounts lacking Bank Verification Numbers (BVN) or National Identification Numbers (NIN) starting from April 2024.
A circular released on Friday by the CBN’s Directors of Payments System Management and Financial Policy and Regulation Departments outlined the steps to be taken. It mandates banks to apply a “Post No Debit” restriction on all existing Tier-1 accounts or wallets without BVN or NIN effective immediately, preventing withdrawals, transfers, or any debits. Funded accounts without BVN or NIN will face the same restriction starting March 1, 2024.
The circular also stipulates that BVN or NIN linked to accounts/wallets must be electronically revalidated by January 31, 2024. The CBN emphasized that a comprehensive BVN and NIN audit will be conducted shortly, with potential sanctions for identified breaches.
To streamline the onboarding process for new customers, the CBN will retrieve BVN or NIN-related information electronically from the National Identity Management Commission (NIMC) or Nigeria Inter-Bank Settlement System (NIBSS) databases. Existing accounts with validated BVNs will be profiled in NIBSS’ Identity Confirmation, Authentication, and Verification System (ICAD) within 24 hours of opening.
For individuals lacking a BVN or NIN, the CBN instructed financial institutions to begin the enrollment process onto the BVN database, adhering to guidelines provided by NIBSS.
The CBN’s decision to implement these stringent measures aligns with its commitment to promoting financial system stability and bolstering KYC practices in the country’s financial institutions.
