Bank accounts with BVN rise to 38m

However, based on the number of active bank accounts in the country, which was 72.9 million as at April, about 34.9 million active accounts are yet to be linked five years after the introduction of the banking security measure.

BVN is a unique number for customers of banks in Nigeria, which contains biometric details of customers, including the fingerprint of all 10 fingers and facial image. The Central Bank of Nigeria (CBN) through the Bankers’ Committee and in collaboration with all banks in Nigeria launched a centralised biometric identification system for the banking industry in 2014.

The biometric identification was introduced to address identity theft, reduce exposure to fraud and enhance the banking industry’s chances of being able to fish out blacklisted customers, among others.

Analysis of data released by the Nigeria Inter-bank Settlement Systems (NIBSS) showed that registration for BVN has been very slow compared with the rate of accounts being opened in the country. For instance, 2.04 million bank accounts were opened in the country between December 2018 and February 2019.

According to NIBSS, the total number of bank accounts opened by Nigerians, which stood at 118.1 million as at the end of December last year, inched up to 118.9 million in January and rose to 120.1 million in February. By March, the number of bank accounts in the country rose to 120.9 million and in April, it hit 121.6 million.

Further breakdown of the data indicates that the number of active bank accounts also rose during the period, as it grew from 71.2 million in December last year, to 71.7 million in January and 73.5 million in February. In March, active accounts rose to 74 million but declined to 72.9 million in April.

While BVN is seen as a potent tool to fight corruption because every account owner can be identified and traced, industry analysts said it has led to increase in the number of inactive bank accounts and unclaimed funds in banks, as people with questionable sources of fund are unable to claim their accounts and link it with BVN. They noted that this is also responsible for the large number of accounts yet to be linked with BVN, adding that the figure may not likely reduce.

However, to increase the rate of enrolment for BVN, recent reports indicated that Deposit Money Banks (DMBs) in the recently announced plans to start freezing corporate accounts that do not have BVN details of all their signatories, Directors and beneficial owners.

According to an email sent by a Tier 1 lender to its customers last week, the planned restriction on corporate accounts without requisite BVN details of all their Directors and signatories is in compliance with a directive issued by the CBN to lenders that all customers’ accounts should have the BVN details of all signatories, Directors as well as beneficial owners linked to their respective non-individual accounts.

Meanwhile, the apex bank also recently said it was planning to introduce a new mechanism, called the Global Standing Instruction, which would work with the BVN of depositors to detect bad borrowers who refuse to pay their loans but plans to take another loan from other unsuspecting banks. The regulator planned to introduce the mechanism this year.

The CBN said the GSI would bring out the credit history of any debtor who planned to borrow from any bank, and all Nigerian banks would be provided such information. The mechanism, it was learnt, would make it impossible for any borrower to get another loan from another bank without first repaying all outstanding loans. (New Telegraph)