Sanction against bank customers who do not have Bank Verification Numbers (BVNs) begins at the end of June.
One consequence likely to bite hard is the denial of access to accounts, implying that a customer will not be able to withdraw money.
The Central Bank of Nigeria (CBN) launched BVN in February 2014 to revolutionise banking and payment systems and help prevent fraud.
It is the registration of customers in the financial system using biometric technology which records a person’s unique physical traits such as fingerprints and facial features. The data is used to accurately identify a customer and is not easily manipulated.
BVN offers unique verifiable identity across the banking industry and protects accounts from unauthorised access.
The CBN said the objective is to protect bank customers, reduce fraud, and strengthen the financial system.
“Fraud is reduced because no two persons have the same biometric information. Banks will therefore be able to check the features of a person doing a transaction against the record which the bank has captured, thereby correctly identifying the owner of an account accurately,” the CBN explained.
With BVN, the incidence of fraudulent or duplicating of bank accounts will be highly reduced, if not eliminated, as the mechanism highlights and blacklists customers who engage in such.
BVN provides standardised efficiency of banking in which all operations are verified using the same method, reducing cases of human error or inconsistency.
It means transaction authentication using biometrics, not cards
Customers’ duty
The CBN advised bank customers not to respond to suspicious emails pretending to be from their bank and asking them to provide sensitive information online.
Customers are to contact their bank directly if they do not know how to enroll for BVN.
Banks in Lagos State began biometric registration of customers on June 16, 2014. Customers are required to visit any branch of their bank for biometric data capturing, and all banks were required to enroll at least 40 per cent of their customers by December 31, 2014.
They are to enroll at least 70 per cent by March 30, 2015.
Most customers yet to register
More than half of bank customers are yet to understand the import of BVN let alone get registered. This is as a result of misconceptions about the real intention of the initiative.
There are concerns over the safety of personal information, a lack of privacy, abuse of BVN, and fraudsters mining sensitive information from banks to steal money.
The CBN has taken steps to raise awareness and to encourage customers to register.
From November 3 last year, the CBN directed banks to stop giving out new loans to borrowers without BVN, and it became a condition for draw down.
But investigation showed that a good number of bank customers could not understand the essence of BVN.
The Managing Director/Chief Executive Officer, CRC Credit Bureau, Tunde Popoola, whose company collects information about borrowers and merges them to produce a credit information, explained that BVN is an initiative of the Bankers Committee to produce a financial identity number.
He said it is about giving an individual bank customer a unique identification across all financial institutions.
His words: “With this, every customer of the banking industry has only a unique identification which describes you. Now, there is no one means of identifying persons who transact business with the financial services industry as you have with registered businesses.
“This is why it is convenient for fraudsters to open accounts in several banks with different names, addresses, and means of identification. The new scheme will address the challenge.”
CBN Head of Media and Corporate communications, Isaac Okoroafor, added that the plan is to have a proper identification of customers which is a prerequisite for efficient payment system.
He said BVN will address the safety of customers’ funds and avoid losses through compromise of Personal Identification Numbers (PINs).
“Driver’s licence, passport, national identity card, and other documentation that identify customers would not necessarily be required when making transactions as soon as a customer gets his BVN.
“Also, customers who are not educated or who do not have identity cards with which to open bank accounts can do so seamlessly once their biometric information has been taken,” Okoroafor explained.
How to enroll
Visit any branch of your bank.
Fill out and submit the BVN enrolment form.
Information such as fingerprints and facial imagery is recorded.
Acknowledgment slip with transaction ID is issued.
BVN is created and it is sent by text to the customer or is asked to come and collect it.
