Finally, CBN Releases Guidelines for Watch-listing of Fraudsters, BVN


In exercise of its powers and in line with its desire to promote and facilitate the development of efficient and effective payment systems in the country, the Central Bank of Nigeria (CBN) Thursday issued the regulatory framework for the bank verification number (BVN) operations as well as for watch-list of fraudsters in the banking industry.

The central bank disclosed this in a circular posted on its website Thursday. It explained that the initiative was also expected to deepen the electronic payment system.

The framework also defined the establishment and operations of watch-list for the banking industry, to address the increasing incidences, of frauds, with a view to engendering public confidence in the banking industry.

The central bank in collaboration with the Bankers Committee had proactively embarked upon the deployment of a centralised bank verification system and launched the BVN in February, 2014. This was part of the overall strategy of ensuring effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system.

However, the central bank in the latest circular explained that the objectives of the regulatory frame work for both BVN and watch-list operations, among other things, are expected to clearly define the roles and responsibilities of stakeholders; clearly define the operations of the BVN in the country; as well as to define access, usage and management of the BVN information, requirements and conditions.

Furthermore, it is expected to provide a database of watch-listed individuals; to outline the process and operations of the watch-list; and deter fraud incidences in the banking industry.

The watch-list comprises a database of bank customers’ identified by their BVNs, who had been involved in confirmed fraudulent activity in the banking industry in Nigeria.

According to the central bank, a watch-listed individual shall not be allowed to enter a new relationship with any bank.

Part of the penalties include that “a bank may choose not to into continue business relationship with account holder on the watch-list.”

“Where a bank chooses to continue an existing business relationship with holders of account on the watch-list, the account holder shall be prohibited from all e-channels, such as ATM, PoS, internet banking, mobile banking, including issuance of third-party cheques.

“A watch-listed customer shall not provide reference to another customer, neither shall he/she be allowed access to credit facility or guarantee credit facilities.

“A watch-listed individual shall remain in the watch-list for a period as specified in the penalty table. In the event of a re-occurrence, the tenure shall begin to count from year one.”

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