Bank customers who are yet to obtain Bank Verification Number are now at risk of losing the funds in their bank accounts following a court order obtained by the federal government.
This is even as fraudsters who already have BVN risk being restricted from the banking sector for up to 10 years.
The federal government at the weekend secured an interim forfeiture order from Federal High Court which would now allow it to freeze the accounts of bank customers in Nigeria who have no BVN.
The order obtained before Justice Nnamdi Dimgba of the Abuja division of the court gave the federal government the nod to instruct the banks to disclose any investments made with these funds and to freeze any outward movement from these accounts.
Dated October 18, 2017, the court order mandates the Central Bank of Nigeria, CBN, to appoint an examiner to examine the books of any commercial bank that fails to comply.
Through the order, the federal government is seeking: Names of accounts without BVN; Account Numbers; Outstanding balances; Domicilary accounts without BVN; Branch/locations where these accounts are domiciled.
The order also empowers the government or any agent it applies to advertise the accounts without BVN in a widely circulated newspaper and gave a period of 14 days for the account holders to claim ownership and give a tangible reason why the funds should not be forfeited.
BVN is issued by the CBN after biometrics (finger print and photograph) details of a bank customer have been captured.
Associated to this is the Know Your Customer, KYC, requirements which is a means of identification and proof of address required before customers can operate or open a bank account.
Meanwhile fraudsters in the country will now have a harder time doing business as they can now be restricted from the Nigerian banking industry from five to 10 years while fraudsters at large will be barred from banks.
From now, they will not be allowed to do any transactions through electronic channels, such as Automated Teller Machines, Point of Sale terminals, Internet Banking, Mobile Banking, including issuance of third-party cheques.
According to the Regulatory Framework for Bank Verification Number (BVN) Operations and Watch-List for the Nigerian Banking Industry, released by the Central Bank of Nigeria (CBN) even fraudsters who have not committed monetary infractions would be blacklisted.
READ ALSO: AfDB to invest $24b in Agric
The framework stipulated that a “watch-listed individual shall not be allowed to enter into new relationship with any bank and a bank may choose not to continue business relationship with account holder on the watch-list.”
“Where a bank chooses to continue an existing business relationship with holders of account on the watch-list, the account holder shall be prohibited from all e-channels, such as ATM, POS, Internet Banking, Mobile Banking, including issuance of third-party cheques.
“A watch-listed customer shall not provide reference to another customer, neither shall he/she be allowed access to credit facility or guarantee credit facilities.
“A watch-listed individual shall remain in the watch-list for a period as specified in the penalty table. In the event of a reoccurrence, the tenure shall begin to count from year one. Penalties that applied to watch-listed customers shall apply to all accounts that he or she is a signatory to” the framework stated.
The framework categorised forgery, compromise, complicity, fraudulent duplicate enrolment and any fraudulent infraction without monetary value as category 0 and would be restricted from banking services for five years.
Meanwhile, confirmed successful fraud with monetary value and customers who have been watch-listed more than twice categorised 1 and 2 respectively will be restricted for up to 10 years.
Category 2 individuals will however have their transactions limited to the branch where it is domiciled.
However, individuals who committed fraud and is at large, categorised as 99 will asides the other restrictions have a Post-No-Debit flag on all the accounts linked to the individuals’ BVN.
The CBN had in 2014 launched the BVN which is to help combat identity theft and fraud in the banking sector.
