BETWEEN CBN AND BVN DEFAULTERS

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MONDAY EDITORIAL

The BVN is a tool to fight economic and financial crimes in the country

With about 38.5 million bank accounts already linked to the Bank Verification Number (BVN), according to the Nigerian Interbank Settlement Scheme (NISS), a lot has been achieved in a bid to curb illegal banking transactions in the country in addition to reducing incidence of corruption. But much still needs to be done against the background that this represents just 31 per cent of the total number of bank accounts, and 53 per cent of the total number of active bank accounts in the country. Data from the NISS reveal that the total number of bank accounts as of June this year was 122.37 million while the number of active bank accounts was 72.97 million.

The Central Bank of Nigeria (CBN) had in 2014 introduced the BVN policy to all commercial deposit banks across the country essentially to check identity theft in the banking system. It was also designed to address issues of money laundering, aiding credit extension and boosting financial inclusion since those who cannot read or write can open and access their bank accounts with their biometric information. The policy involves capturing customers’ biometric data for financial transactions across all banking platforms. The BVN is a unique identification number for customers of banks in Nigeria. It is linked to the biometric details of customers including their fingerprints and facial images.

Even though many have raised concerns about the intention, we consider the introduction of the BVN as one of the smartest ways to fight economic and financial crimes in the country and we encourage the CBN to work towards removing the legal and institutional hurdles that hamper full compliance by all the banks operating in the country. But the pertinent question remains: Why are some people with genuine claims to the money in their bank accounts afraid to put their biometrics to such accounts? Honest bank depositors should not shy from having the security numbers that ordinarily help to protect their funds. It is only depositors who have things to hide that would refuse BVN.

Meanwhile, that CBN is planning to introduce a new mechanism called the Global Standing Instruction (GSI) which will work with the BVN of depositors to detect bad borrowers, is commendable. In a milieu where many prominent citizens have perfected the art of living off other people’s money, hopping from banks to banks to secure loans they don’t intend to pay back, the GIS will help the banks to avoid serial borrowers. The impact of taking money from banks and not paying back is felt by the larger society with serious implications for the economy.

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In a communique after its monetary policy committee (MPC) meeting last week, the CBN said the GSI initiative is aimed at “de-risking credit in the industry by committing bank customers to repay their loans to banks”. The MPC further noted “the increased supply of micro credit to key micro small and medium enterprises (MSMEs) and efforts through the Nigeria incentive-based risk sharing system for agricultural lending (NIRSAL) microfinance bank to extend the reach of its credit facilities across the country.”

Unfortunately, there are reports that some security agencies are already tampering with some accounts that have no BVN by making illegal withdrawals. This is a serious issue that goes to the heart of the anti-corruption war of the current administration and we hope President Muhammadu Buhari will order an investigation of the allegation and deal with culprits. However, we endorse whatever legal action the federal government may take on all accounts that have no BVN. Five years is long enough for anyone to comply with the policy which essentially is meant to curb fraudulent activities in the financial system.