Steve Udoh: Tier-1 account NIN, BVN are essential to combat fraud

Steve Udoh: Tier-1 account NIN, BVN are essential to combat fraud

When the Central Bank of Nigeria (CBN) mandated the linking of Bank Verification Number (BVN) and National Identification Number (NIN) across all tiers of accounts in Nigeria in December 2023, this It caused a wave of panic among customers. Accounts without BVN or NIN.

The apex bank said in a circular addressed to all commercial banks, merchant banks, interest-free banks and payment services banks signed by the CBN's Director of Payment Systems Management, Mr. Chibuzo Efobi and Director of the Department of Monetary Policy and Regulation, Mr. Haruna Mustapha. , other financial institutions and mobile money operators have stated that all existing and new Tier 1, 2, and 3 accounts/wallets require a BVN or NIN.

Mr. Mustapha noted that this obligation was part of the apex bank’s efforts to promote stability in the financial system and led to the amendment of Section 1.5.3 of the Regulatory Framework for BVN Operations and the Nigerian Banking Industry Watch List (Guidelines). did.

The CBN circular also states that existing unfunded individual Tier 1 accounts without a BVN or NIN will be set to “no debit or credit” with immediate effect.

“For all existing Tier 1 accounts/wallets without a BVN or NIN: Effective immediately, unfunded accounts/wallets will be placed in “posted without debit or credit” until the new process is met.

“From March 1, 2024, all funded accounts or wallets will be placed in a ‘posted without debit or credit’ position and no further transactions will be allowed. BVN or NIN attached and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024,” the circular states.

Additionally, to ensure uniform and complete compliance, the Executive Compliance Officer, Chief Compliance Officer, or Head of Compliance should familiarize himself with the attached guidance notes applicable to all CBN-regulated institutions. He said that this is recommended.

Officials noted that the issue was being treated as a “national security issue” and added that banks caught with operating accounts without BVN or NIN after the expiration date “will be dealt with harshly.” Investigations further revealed that as a result of this directive, Nigerians began besieging commercial banks and the National Identity Management Office.

Examining the legal framework underpinning this policy, the National Identity Management Commission (NIMC) Act of 2007 established the NIMC and the National Identity Database (NID), which contains unique NINs assigned to Nigerian citizens and legal residents. You can see that the creation of the .

While the Mandatory Use of National Identification Number Regulations of 2017 further provides for the use of NINs for various transactions such as employment, access to social intervention programs, and opening bank accounts, CBN policy does not extend to this existing It is based on a legal framework and aims to strengthen finance. Strengthen security and inclusion by mandating the inclusion of identity documents across all segments of the banking system.

However, industry records show that there are just over 100 million Nigerians registered with NIMC, while the latest data from the Nigeria Interbank Settlement System (NIBSS) as of October 9, 2023 shows that 5,900 Nigerians are registered with BVN. It has been revealed that there are 58,999,262 million (58,999,262) accounts. It is expected that the normalization of accounts without BVN or NIN can be achieved within the deadline given the progress already recorded on both fronts.

Taking a closer look at this development, this policy is a major boost in reducing identity theft and fraud, and preventing unauthorized access to personal accounts.

Fighting money laundering

At the plenary session of the Financial Action Task Force held in Paris, France at the end of October, Nigeria failed to scale up the money laundering and terrorist financing risk investigation conducted by the World Financial Intelligence Organization.

The international body condemned Nigeria's anti-money laundering war and placed the country on an international gray list in February, along with South Africa and 20 other countries.

The Nigerian Financial Intelligence Service said it has been working to meet FATF recommendations on money laundering and terrorist financing, but did not expand the scale of the review that FATF conducted at its last plenary session.

Countries on the FATF gray list are identified as having strategic deficiencies in their anti-money laundering, terrorist financing, and proliferation financing regimes. According to KPMG, the implications for the gray listing of Africa's two largest economies could be far-reaching.

Regarding Nigeria, KPMG said: “The FATF noted that although Nigeria has made some progress since adopting the Mutual Assessment Report in August 2021, there is a need to implement the FATF Action Plan. It adds further risk and complexity to companies that already recognize Nigeria as a high-risk country for anti-corruption and other financial crimes. This could subject companies with ties to Nigeria to further regulatory scrutiny as they may be expected to take significant AML/CFT compliance measures.”

Greylisting may also result in increased compliance costs and increased due diligence requirements for companies, making it more difficult to do business with Nigerian counterparties. A key element of the FATF's anti-money laundering requirements is Know Your Customer (KYC), which helps financial institutions verify the identity of new and existing customers. This directive by the CBN is therefore a tool to remove Nigeria from the gray list and strengthen the fight against money laundering in Nigeria.

Strengthening financial inclusion and financial security

So far, Nigeria has brought more citizens into the financial system, but it is still far from its goal of having 95 percent of the population fully banked by 2024. According to UK government-backed company EFInA, the proportion of Nigerian adults who use formal financial services such as bank accounts, insurance and mobile money will increase from 56% in 2020 to 64% in 2023. increased to.

But only about 52 percent of people have a bank account, and widespread poverty in the country is hampering more comprehensive adoption. This Directive, especially if strictly implemented, offers a broader meaning of increasing the number of people economically included. If this happens, fraudsters who previously used stolen information to conduct fraudulent transactions will face even greater challenges.

Promote economic growth and improve profits

Apart from prevention and financial inclusion, the directive is expected to open up new markets, promote entrepreneurship and encourage job creation. Similarly, accurate identification technology would make tax evasion by individuals and businesses much more difficult. This could lead to increased government revenue and improved public services, benefiting all Nigerians.


The truth is that very few policies have been successfully implemented in Nigeria. The responsibility now lies with the CBN to revolutionize the country’s financial sector through financial security, empower Nigerians and stimulate economic growth through updated directives. January 31, 2024 seems like a long time, but CBN and NIMC are doing everything humanly possible to deftly avoid potential pitfalls and build on the bright future this ambitious initiative promises. need to be cut open.


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