CBN orders banks, mobile money operators to revalidate customers’ BVN by January 31

According to a circular released on December 1, 2023, by the CBN, all commercial, merchant, non-interest, payment service banks, financial institutions, and mobile money operators are required to electronically revalidate BVN or NIN attached to accounts/wallets by January 31, 2024. Starting from March 1, 2024, funded accounts lacking BVN or NIN will be placed on ‘Post No Debit or Credit,’ prohibiting any further transactions.

This issuance by the Central Bank of Nigeria has posed a potential threat to millions of bank accounts, as the deadline approaches for all accounts and wallets to be linked to either a Bank Verification Number (BVN) or National Identity Number (NIN).

A recent report by Enhancing Financial Innovation and Access (EFInA) indicates that 52% of unbanked adults possess the NIN, while 5% of banked adults do not have a BVN or NIN. As of 2021, the country has a total of 191.4 million bank accounts, with 133.5 million actively in use, according to data from the Nigeria Inter-Bank Settlement System (NIBSS).

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Meanwhile, experts are hopeful that this is not another instance when the apex bank will debunk a previously circulated directive. Recall that in March, the CBN had to explain that the unique 11-digit Bank Verification Number (BVN) issued by the bank in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) does not expire.

The clarification became necessary after reports were spread suggesting that the BVN has a 1o-year validation.

BVN surge, evolving financial mechanisms, and compliance challenges

As of December 18, 2023, the most recent figures from the NIBSS revealed a Bank Verification Number (BVN) count of 59.96 million within the banking industry. The EFInA report indicates an increase in the use of various financial management methods, including banks, non-banks, and informal channels, rising from 10 per cent in 2020 to 20 per cent in 2023.

Despite the issuance and publication of the circular a month prior, a visit by BusinessDay to several bank branches noted low compliance with the directive after speaking with customers and observing the situation.

As seen in a report by BusinessDay, an unrevealed bank branch manager said, “There has been no rush by customers whose accounts have no BVN or NIN. I don’t think customers are informed. If they knew, there would have been a rush by now.”

Sterling Bank’s customer experience officer asserted that many customers will not be affected by the CBN directive as most accounts are already linked to a BVN, emphasizing that BVN creation is a prerequisite for account opening.

UBA bank officer mentioned a surge in customers visiting branches around markets, like Addo and Sangotedo, to link existing accounts to a BVN.

Olanrewaju Kazeem, Group CEO of Alert Group, stated the need to update customer profiles with new CBN directives, highlighting that accounts lacking BVN or NIN post-deadline would face restrictions.

In his words, “We just need to update the customer’s profile on our systems and core banking applications with the new CBN directives. The customers are to come forward with the additional information.”

Rasheed Bolarinwa, president of the Association of Corporate and Marketing Communications Professionals in Banks, urged prompt compliance, emphasizing that failure to link accounts could lead to restricted access.

CBN encouraged compliance officers to familiarize themselves with guidance notes and announced a forthcoming BVN and NIN audit, with sanctions for breaches.

The EFInA report highlighted a rising trend in financial service usage, with increases in savings (2%), remittances (8%), and credit (4%), signifying enhanced financial inclusion. Digital financial services saw a notable surge, with 45% of Nigerians using them in the past year, up from 34% in 2020.

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