The Central Bank of Nigeria (CBN) said that once the Bank Verification Number (BVN) exercise has been fully implemented, the BVN will be used to fish out and blacklist fraudsters in the Nigerian financial system.
This was made known by the director, Banking and Payment System of the CBN, Mr ‘Dipo Fatokun at the Finance Correspondents Association of Nigeria (FICAN) Bi-Monthly Forum held in Lagos at the weekend.
Fatokun who was represented by deputy director, Banking and Payments System Department, Musa Jimoh, stated that with the BVN there is no hiding place for the fraudsters. While noting that a little over 19 million bank customers have their BVN, he stated that the reason “we have not been able to track them is because not everyone has a BVN. There are still some accounts today that don’t have a BVN.
“However, when the cut off comes – in just two months’ time, any bank account that does not have a BVN cannot receive or take out money. So if you are a fraudster and you try to transfer money to an account that does not have a BVN, e system will reject it. If you are fraudster and you transfer money to an account that has BVN then we know you.”
Adding that the data collated will be harmonised with other biometric data collected by other security and identity agents in the country, Fatokun said “once we have that harmonization, the is no hiding place. If any account is used to defraud anyone, we will know who it is.
“We are coming to a situation today that if you are on the board of different companies and you go around to collect loan, we will know who you are. You can’t hide anymore because we will know you as a single entity so your exposure is known to the whole industry.”
Explaining that the absence of a unique identifier in the banking industry has had a negative consequences on the growth of e-payments, Fatokun said the CBN is taking strategic steps to ensure that the level of fraud arising from e-payment transactions are reduced to the barest minimum.
Asides the BVN which gives a unique identifier in e financial sector, he said the CBN had mandated all Banks, Switches and Processors to comply with Payment Card Industry Data Security Standards (PCIDSS) and subsequently conducted an oversight on compliance which showed that most banks had been certified.
Noting that the certification lasts for one year and banks are currently at various levels of re-certification, he explained that PCIDSS is a global compliance standard for any entity that stores, transmits or processes card payment data.
The apex bank, Fatokun said, also directed banks to set up systems that will enable the automatic refund of Automated Teller Machine (ATM) dispense errors to customers. The regulator has also issued guidelines for card issuance and usage meant to provide minimum standards and requirements for the issuance and usage of payment cards in the country.
“Its implementation enables issuing banks, other financial institution, processors and cards schemes upgrade and maintain their card operations to ensure optimum security, efficiency, cost effectiveness and customer friendliness,” he said.
The platform, he added, also serves as a tool for banks and other financial institutions to assess their card issuance portfolio and ensures that consumers that carry Nigerian -issued cards operate within acceptable standards.
“From a regulatory perspective; the CBN acknowledges that less than optimal, inefficient or poorly designed systems will ultimately have a negative impact on systemic stability, economic development and growth. It has therefore consciously pursued the growth of a payments system that is safe, efficient, cost effective and reliable,” he said.
He said payment systems have moved from the backroom to the boardroom of organisations given its strategic importance in today’s globalised world. He said a well-functioning payment system plays significant role in supporting the economy.
He explained that such significance prompted the apex bank to promote a payment system where the underserved and non-served are integrated into formal financial services sector.