The Bank Verification Number commonly called BVN, a biometric identification system implemented by the CBN was originally aimed at curbing or reducing illegal banking transactions in Nigeria. It is a modern security measure implemented in line with the CBN Decree to reduce fraud in the Nigerian banking system.
A circular released by the office of CBN’s Director of Banking and Payment System Mr. Dipo Fatokun has directed banks on further utilization of the Biometric Verification Number (BVN) in their operations. The circular dated July 23, 2016 directed to banks in Nigeria stated as follows:
1. Banks were directed to discontinue the actual address verifications in account opening for customers with BVN.
2. Banks to begin to embed BVN biometric data in payment cards issued to customers, this is to facilitate off line BVN verification and biometric base customer authentication on payment devise as ATM, POS, Kiosk etc.
3. Savings account customers with BVN to be allowed to deposit cheques not more than #2,000,000.00 (Two Million Naira) in value into their accounts per day.
4. BVN watch listed modalities has also been approved and released by CBN to aid Credit Risk Management System (CRMS) data and to facilitate its use to enrich BVN watchlist.
It is logical that biometric registration should simplify banking operations.
1. Customers with biometric data captured in BVN data base and can be called up at anytime by all banks in Nigeria may not need to have its physical address verified.
• All a bank/security agencies needs to do if such a customer is involved in a fraud is to notify all other banks and the customer’s accounts in all banks can be flagged.
• The discontinuation of address verifications will also help reduce the cost of banking services as banks will not need to hire outsourced companies who conduct these actual verifications.
• Marketing staff in banks who are often at the receiving ends of fake addresses by fraudulent customers can also heel a sigh of relieve as BVN as come to their rescue.
2. Embedding BVN data in card will assist in giving confidence to payment gateways and merchants world over. Some of who rejects cards issued in Nigeria
3. Allowing checks in Savings accounts of customers with BVN is another novel approach. CBN perhaps can look into discontinuation of referees for Current account customers as the biometric data base should be enough to verify the identity of all customers and may not need another customer as reference.
4. Synchronizing BVN with CRMS data will enrich credit reports and also provide immediate credit and financial history of customer of banks with its attendant effect on lending and credit administration decisions.
While lauding this initiative of the Apex bank. CBN should work assiduously on the issue of the unbanked and money outside the banking system in Nigeria. 47% of Nigerians are estimated to be unbanked.
ALTHOUGH CBN HAS REVERSED THE DIRECTIVE ON NO ADDRESS VERIFICATION FOR CUSTOMERS WITH BVN. PUBLISHING THIS ARTICLE WAS MOTIVATED BY ITS COMPELLING ARGUMENT.