In a recent move that has sent shockwaves throughout Nigeria's financial sector, the Central Bank of Nigeria (CBN) has mandated that commercial banks bar customers without Bank Verification Numbers (BVN) and National Identity Numbers (NIN) from accessing their accounts starting from March 2024. This directive has prompted concerns among bankers who anticipate a rush of customers scrambling to regularize their accounts in the coming weeks and months. The rush to comply with the new regulations is expected to put pressure on bank employees who will need to register customers for BVN, and on National Identity Management Commission offices responsible for NIN registration.
Industry insiders have expressed mixed sentiments regarding the CBN's directive. While some view it as a necessary step to sanitize the industry, others worry about the strain it will place on banks. A senior official from a Tier-1 bank in Lagos recognized the importance of the directive in enhancing industry compliance but acknowledged the potential difficulties banks may face in handling the anticipated rush. This is particularly concerning as banks have already lost key employees due to a recent wave of resignations, and many have undergone staff rationalization to reduce operating expenses.
A branch manager from a new generation bank, speaking on condition of anonymity, revealed that if the influx of customers without BVN and NIN is substantial, the bank would have no choice but to extend working hours and even consider operating on weekends to clear the impending backlog. This additional workload could put further strain on already stressed employees and potentially contribute to naira scarcity.
However, not all banks are worried about the forthcoming rush. A corporate communications manager from an old-generation bank, who preferred to remain unidentified, expressed confidence in their institution's readiness to handle any challenges that arise from the CBN's directive. According to the manager, advancements in technology have made the work of bankers more efficient, easing the burden associated with customer registrations and compliance.
The term "Post No Debit" has garnered attention due to its association with the CBN's directive. This policy restricts specific accounts, preventing customers from making withdrawals, transfers, or debits until the required BVN or NIN is linked to the account. Essentially, this freezes the funds in the account for the duration of the restriction.
The CBN's directive, outlined in a circular issued to all Deposit Money Banks, aims to promote financial system stability and strengthen "Know Your Customer" procedures in financial institutions. The circular also amends the Regulatory Framework for Bank Verification Number, making it mandatory for all Tier-1, 2, and 3 bank accounts and wallets to be registered with BVN or NIN.
In response to the new guidelines, any funded account or wallet without BVN or NIN will be placed on "Post No Debit or Credit" until compliance is achieved. Furthermore, the CBN has set a deadline of January 31, 2024, for the electronic revalidation of all BVN and NIN associated with accounts and wallets.
The CBN has urged executive compliance officers, chief compliance officers, and heads of compliance functions in financial institutions to familiarize themselves with the attached guidance notes for complete compliance. Non-compliant institutions may face audits, and appropriate sanctions will be applied for identified breaches. The CBN expects strict compliance with restrictions on Tier-1 accounts and wallets in terms of transaction value limits and cumulative balances.
The CBN's decision comes as no surprise, as the bank initially announced plans to remove accounts not linked to BVN in April 2023, citing the need to combat fraud and clean up the sector.
Experts have weighed in on the directive, with some emphasizing the importance
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