In a recent notice, the Central Bank of Nigeria (CBN) has instructed microfinance banks and other financial institutions to place a no debit order on bank accounts with no Bank Verification Number (BVN). Credit lodgements can be placed in such accounts.
The Post No Debit instruction will only be removed when the customer presents a BVN or enrols for the BVN registration. Earlier directives to display notices informing customers and submitting a monthly BVN enrolment report.
What is a Bank Verification Number (BVN) ?
The Central Bank of Nigeria through the Banker’ Committee and in collaboration with all banks in Nigeria on February 14, 2014 launched a centralized biometric identification system for the banking industry tagged Bank Verification Number ( BVN).
BVN is issued after biometrics (finger print and photograph) details of a bank customer have been captured. Know Your Customer (KYC )requirements are a means of identification and proof of address required before customers can operate or open a bank account.
Why the emphasis on BVN enrollment ?
BVN provides a central database for identifying and verifying all individuals that have account(s) in any Nigerian bank and consequently, as a means of authenticating customer’s identity at point of transactions. In addition it provides a uniform industrially accepted unique identity for Bank Customers, and enables them to carry out transactions without using a card.
The Federal Government in October last year approached a federal high court for an interim forfeiture order of funds in bank accounts with no BVN (Bank Verification Number) or incomplete KYC (Know Your Customer) requirements in commercial banks. Banks and their customers have however kicked against the move.