On BVN extension by CBN
The Central Bank of Nigeria (CBN) last week extended the deadline for the Bank Verification Number (BVN) exercise, an initiative aimed at checkmating fraudulent practices in the banking industry occasioned by loan and related offences, among others. The extension was in order to accommodate some customers who for whatever reasons failed to enrol before the earlier deadline of June 30.
The BVN initiative involves the capturing of an individual’s basic biometric data including facial image, fingerprints, as well as other unique features. Each customer’s biometric and personal data are attached to all bank accounts he or she operates, whether personal or corporate. An individual customer can only have a single BVN no matter the number of accounts he/she operates and no matter the number of banks he/she has accounts with. Customers are able to register for BVN in any of the banks in which they have accounts, and once they get their numbers, they are required to send them to all the banks in which they operate accounts.
The goal of the BVN is to uniquely verify the identity of each bank’s customer for ‘know your customer’ (KYC) purposes. It will ultimately ensure accountability, check identity theft, reduce exposure to fraud, enhance credit advancement to bank customers, protect customers’ accounts from unauthorised access as well as encourage financial inclusion.
For the CBN, the initiator of the scheme, and for all who appreciate its benefits, the BVN is indeed a game changer. Individual banks under the scheme would have a database of their customers shared across their branch network, while the Nigeria Inter-Bank Settlement System (NIBSS) will host the industry-wide database.
With all its stated benefits, it is regrettable that the usual Nigerian last-minute syndrome played out last week as many customers besieged the banking halls to register for a scheme that has been on for over 10 months, a situation that caused chaos and pandemonium across the major cities of the country. This is why we think that, good as the extension is, the CBN should not entertain further extension by the time the new deadline expires on October 31, 2015. The exercise is not time-consuming and failure by bank customers to enrol should be construed as deliberate action on their part.
In order to ensure that all customers register before the new deadline and, by so doing, reap the full benefits of the current campaign for financial inclusion and cashless policy, we urge banks in the country to join hands with the CBN in heightening the tempo of public enlightenment campaign on the BVN as well as come up with fresh initiatives to make the process easier for customers. On this score, we note that, for instance, in response to some of the challenges associated with the exercise, United Bank for Africa (UBA) plc on July 6 introduced a simple, convenient and hassle-free process that involves bank customers who already have their BVN from other banks sending their BVN to a short code number *919*6#.
“All a customer has to do is to send his or her valid BVN from the telephone number that was used to open their account to the short code number and it will become automatically linked,” said Rasheed Adegoke, director, Group Information Technology, UBA plc, at the launch of the initiative.
Adegoke further explained that once customers submit their BVN through the code, they will get an immediate response letting them know whether their BVN is valid or incorrect. The responses will be accompanied by a phone number through which further enquiries can be made by the customers if required. In addition, customers can also reach UBA via Facebook and Twitter or by calling UBA’s Customer Fulfilment Centre for further clarifications.
We commend UBA for this initiative and urge other banks to take a leaf. This, in our view, will enable more and more customers to enrol. But when the carrot approach fails to achieve the desired result, we urge the CBN not to hesitate in wielding the big stick. Perhaps more stringent measures, like limiting customers’ access to their accounts, should be devised to compel customers to comply and register for this all-important scheme.