The Federal High Court in Abuja on Friday affirmed the legality of the Nigeria Inter-Bank Settlement System Plc’s (NIBSS) management of the Bank Verification Number (BVN) database across Nigeria, in line with the Central Bank of Nigeria (CBN) Act and other relevant banking laws.
Justice James Omotosho delivered the judgment in a case filed by Wolemi Esan, SAN, lead counsel to NIBSS, involving Kofo Abdulsalam-Alada, lead counsel for the CBN, among others.
Nairametrics previously reported that NIBSS’s lead counsel, Esan, through originating processes seen by Nairametrics, had joined the Incorporated Trustees of Digital Rights Lawyers Initiative, the CBN, and the Attorney General of the Federation (AGF) as first to third defendants.
He sought a restraining order to prevent any institution in Nigeria from challenging NIBSS’s statutory authority to maintain and manage the BVN database.
He also sought:
“A declaration that the plaintiff’s maintenance and management of the Bank Verification Number (BVN) data of Nigerians does not violate their constitutional right to privacy or any extant laws in force in Nigeria.
“ An order of perpetual injunction restraining the 1st Defendant (Digital Rights Lawyers Initiative), and any other entity, person, or institution whether directly or through agents, officers, employees, privies, or any person acting under their instruction or control from contesting the plaintiff’s statutory authority to maintain and manage the BVN database,” the reliefs partly read.
Legal Dispute
According to the senior lawyer, the plaintiff (NIBSS) is responsible for initiating, developing, and regulating an integrated, nationwide network for electronic and paperless payments, funds transfer, and settlement of transactions pursuant to the aforementioned laws and statutes.
NIBSS had accused the Digital Rights Lawyers Initiative of filing multiple suits, either directly or through proxies, challenging its authority to manage the BVN database and alleging that such management violates constitutional privacy rights.
On his part, the CBN lead counsel, Abdulsalam-Alada, drew the court’s attention to his counter-affidavit filed on February 11, 2025.
In his court filings, he urged the court to hold that NIBSS’s management of the BVN database is statutorily authorized, constitutionally justified, and essential for maintaining the stability and security of Nigeria’s financial system.
“The initiative does not infringe on the constitutional right to privacy but rather serves as a necessary tool for safeguarding public interest and enhancing financial security,” he added.
He said the power of the apex financial system regulator to issue directives on BVN development is derived from the provisions of the Central Bank of Nigeria Act of 2007 and the Banks and Other Financial Institutions Act of 2020.
He stressed that the CBN has the power under Section 47(2) of the CBN Act to develop payment and settlement systems in Nigeria.
Court Judgment
- Delivering his judgment on Friday, Omotosho held that the powers of the CBN to make financial regulations are also established in the Banks and Other Financial Institutions Act (BOFIA) 2020.
- The judge stressed that the BVN does not constitute a breach of anyone’s fundamental right to privacy.
“NIBSS has the power to manage the BVN,” the judge said, citing relevant CBN laws.
“The court grants the reliefs of NIBSS as prayed,” the judge stated.
- The judge subsequently declared that NIBSS is empowered by law to maintain the BVN.
- The judge also declared that NIBSS’s management of the BVN does not violate privacy rights in Nigeria.
- Omotosho further restrained the Digital Rights Lawyers Initiative and any other entity, person, or institution from challenging NIBSS’s management of the BVN.
- The judge concluded that his verdict is a judgment in rem (that is, the judgment upholds a right as against the whole world), except if it is set aside on appeal.
What you should know
- This case highlights NIBSS’s legal efforts to clear all hurdles regarding its maintenance and management of the BVN.
- NIBSS believes it has the statutory authority to manage the BVN but sought the court’s protection following several litigations in recent years.
- NIBSS’s legal move is supported by the CBN.
- The BVN is a unique number that allows individual accounts to be verified across the Nigerian banking industry.
- The BVN is issued to every bank customer at enrollment and is linked to all of the customer’s bank accounts in Nigeria.
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