DON OKERE  |  

The Central Bank of Nigeria’s (CBN) Bank Verification Number (BVN) exercise will end on October 31, 2015, after it was shifted from the initial June 30 deadline. Even though analysts are of the opinion that the policy would help to sanitise the banking sector, they also “advise that beyond the expiry date that there is the need to maintain some flexibility on this matter”. Customers also have decried the double registration they were compelled to engage in even though the Nigeria Inter Bank Settlement System (NIBSS), which coordinates the data gathered from BVN, had assured that data would only have to be taken at one bank, notwithstanding the number of accounts an individual has or banks they use. But this has not proved to be so as customers still have to re-register when they use other banks, despite the fact that they already have their BVN.

Bank-Verification-Number.jpg1_-640x431It would be recalled that the BVN exercise was launched on February 14, 2014 by former CBN governor, Sanusi Lamido Sanusi. The registration, which commenced in July 2014, had its first deadline for December 31, 2014 when it was expected that all customers would have had their BVNs. Again, banks were expected to have enrolled 40 percent of their customers before the end of the 2014 and 70 percent on or before March 31, 2015 and all of their customers by June 30, 2015. The shift to October 31 was informed by calls from bank customers, who had inundated the banks just two days before the June 30, 2015 earlier deadline, during which most of them could not be attended to by the banks, due to the enormous number of customers that besieged the banking halls. Extending the deadline, the CBN had said over 14 million bank customers including Diaspora Nigerians, would have been affected if the deadline had not been shifted.

Explaining the benefits of the exercise to Business Hallmark, Dr. Boniface Chizea, CEO, BIC Consultancy Services, Lagos, said the BVN is a unique device which is to provide greater security to customers in their dealings with their banks. “It is computer based essentially for the capture of some biometric details of the customer which for now is limited to finger prints and facial features. It is expected that in due course that other biometric details such as the eye Iris etc. would be added to the biometric details to be captured.

“What this does is to limit the possibility of unauthorized access to customer’s account with fraudulent intentions. It is expected that with the adoption of this system that the amount of monies lost to frauds would crash thereby giving customers more confidence in their dealings with the banks in process promoting financial sector deepening. As this system is perfected it should contribute in no small measure to contributing to the goal of the attainment of financial sector stability which is a core mandate of the CBN”, Chizea said told Business Hallmark.

He advised that beyond the expiry date of October 31, the CBN should maintain some level of flexibility on the issue. He asked to what extent has the central bank been able to include customers in the Diaspora?

For the central bank to ensure that the system is comprehensive as well as inclusive, he said it “must allow for late registration even if at a cost as it will be too optimistic and therefore unrealistic to expect that all bank customers would have complied at the expiry of the deadline of end of October, 2015”. On its success, he said once the central bank guarantees that customers will not be able to do banking transactions without the BVN, to the extent that it keeps fidelity to this observation the success of the process should, therefore, be taken for granted.

An analyst cautioned CBN to make sure the BVN does not go the way of SIM card registration in the telecommunications sector, where those who had registered where recalled to re-register, barring them from making or receiving calls, thereby affecting their businesses. He said there must be comprehensive synergy between the banks, NIBSS and CBN to avoid this scenario.

On fears over any downside in the exercise, Chizea said there are no ascertainable ones for now “except the imperatives for technological upgrade as progress is made and as the system attempts and struggles to keep abreast of technological progress and developments which could have cost implications which one hopes would remain affordable to continue to guarantee sustainability. There is also a distant possibility that banks might attempt to use the biometric details to blackmail an estranged customer but one should expect that not to be a problem if the regulator keeps fidelity to its responsibility in this regard”.

The BVN project manager at Nigeria Inter Bank Settlement System (NIBSS), Oluseyi Adenmosun, explaining the workability of the process, had said once the account of a customer is linked, the customer’s identity could be authenticated at point of transactions. One wonders why every exercise is made difficult. The NIBSS has said once one registers in one bank where he has an account that takes care of all his other accounts in other banks. An official of one of the old generation banks said they still have to take the biometrics of the a customer who had registered with another lender in order to harmonize the data and make sure that it is the same customer running both accounts.

This means that for any customer who has active accounts with up to two or more banks, he would have to register at all the banks. Even though the apex bank has directed that customers should not be taken through this kind of ordeal by directing lenders to allow customers submit their BVN online or through ATMs, one pertinent question is does the CBN know that there are bank customers in the rural areas where these processes may not be readily available or doable?

Even at that, the circular to all banks and licensed bureaux de change (BDCs) last week on the use of Bank Verification Number (BVN) is too early especially as the apex bank has not reviewed the exercise to ascertain its success or shortfall. The central bank has directed all banks and BDCs that with effect from November 1, 2015, all customers desiring to purchase foreign exchange through all available channels in the country must provide their BVNs, which shall be validated by the NIBBS platform before the transactions are consummated. It is imperative that institution like the CBN avoids hurried implementation of policies. It must appraise and reappraise a policy before its implementation to avoid missteps, even though no policies can guarantee utmost infallibility. That is why it is important that beyond October 31 BVN deadline there is the need to maintain some measure of flexibility.