CBN places 7,552 bank customers on BVN watch list; cites rising fraud

BVN card

CBN places 7,552 bank customers on BVN watch list; they may be excluded from financial system

By Jeph Ajobaju, Chief Copy Editor

Account holders on Bank Verification Number (BVN) watch list for fraud-related activities grew 25 per cent to 7,552 in the nine months to March, highlighting rising fraud in the financial system.

The Central Bank of Nigeria (CBN) said the number from 6,045 in June 2022 to 7,552 in March 2023, growing by 1,505 cases.

CBN Payment Systems Management Director Musa Jimoh gave the figures at the 34th Seminar for Finance Correspondents and Business Editors holding in Calabar.

Acting CBN Corporate Communications Director Adbulmumin Isah explained the parley was aimed at deepening the electronic payment system.

Jimoh, represented by Assistant Director Adefuye Adeyemi, said those under  investigation for fraud are at risk of exclusion from the financial system.

CBN Governor Godwin Emefiele disclosed BVN enrolment increased to 57.43 million on 31 March 2023, stressing BVN helps develop depositors’ credit profiles and improves access to credit.

Emefiele, represented by CBN Monetary Policy Director Hassan Mahmud, explained BVN features know your customer (KYC) requirements as part of plan to facilitate the identification of bank customers.

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Purpose of BVN

BVN helps in tracking, identifying, and investigating fraudulent financial transactions, he added, but that it has not been all rosy implementing digital payment because of weak social infrastructure.

“Effective operation of payment platforms is highly reliant on stable telecommunication networks and power infrastructure. These are currently not optimal in Nigeria, thus impacting the stability and resilience of the payments system,” Emefiele explained, according to reporting by The Guardian.

He also cited the criminal activities of unlicensed entities in the payment value chain.

“Some entities have continued to exploit access to information technology to engage in regulated activities without the appropriate licences and authorisation. The activities of fraudsters continue to threaten the resilience of payment platforms.

“The confidence of the public is impacted by these activities. However, the collaborative effort between the Central Bank of Nigeria and other players in the industry is helping to curtail the nefarious activities of these fraudsters.”

Emefiele announced one of the steps the CBN has taken to stem the tide is the establishment of the Nigeria Electronic Fraud Forum (NeFF), which comprises all relevant stakeholders, to tackle challenges and safeguard the integrity of e-payment channels.

With the initiatives introduced so far, he stressed, the CBN has demonstrated irrevocable commitment to ensuring the stability and safety of the Nigerian payment system.

“Accordingly, we shall continue to deepen our oversight of the activities of operators in the payments system as well as ensure full compliance with regulations. In this regard, examiners and supervisors would continue to ensure that services delivered by participants meet required security standards.

“The bank will also continue to adopt a collaborative approach to achieve minimal cybersecurity threats in the payments system. A holistic mechanism for addressing cybersecurity threats requires policy and operational actions by all stakeholders.

“As you are aware, effective January 2023, the bank issued Risk-Based Cyber-Security Framework and Guidelines for Other Financial Institutions to ensure their operational resilience in the face of cyber-security threats.”

Emefiele also highlighted the role of the CBN digital currency (CBDC) – eNaira – in advancing the smart payment system, disclosing total eNaira transaction has risen to 1.4 million, nearly double the volume in its first anniversary.

Jeph Ajobaju:
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