Making A Success Of BVN Enrolment In Nigeria | Independent Newspapers Limited
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Business, Money Market

Making A Success Of BVN Enrolment In Nigeria

Posted: Sep 30, 2015 at 8:04 am   /   by   /   comments (0)

By Sola Alabadan,


Essence Of Bank Verification Number

On February 14, 2014, the Central Bank of Nigeria (CBN), through the Banker’ Committee and in collaboration with all banks in Nigeria on February 14, 2014 launched a centralised biometric identification system for the banking industry tagged Bank Verification Number (BVN).

It is an initiative aimed at ensuring unique identity for all bank customers and other users of financial services in the country by the use of the customers’ biometrics as means of identification.

The BVN was introduced in view of the fact that the increasing incidents of compromise on conventional security systems (password and PIN) demand for greater security for access to sensitive or personal information in the banking system. This is taking into consideration the fact that, in recent times, biometric technologies have been used to analyse human characteristics as an enhanced form of authentication for real-time security processes.

Biometrics refers to identifying an individual based on physiological or behavioural attributes – fingerprint, signature etc.

This initiative is highly beneficial as the BVN gives a unique identity that can be verified across the Nigerian banking industry and customers bank accounts are protected from unauthorised access.

It was also intended to address issues of identity theft, thus reduce exposure to fraud as well as enhance the banking industry chances of being able to fish out blacklisted customers and reduce queue in the banking halls.

Besides, it is expected that the BVN will facilitate standardised efficiency of banking operations and the customers unique BVN is accepted as a means of identification across all banks in the country.

Time ticks for bank customers to enroll for BVN

Initially, it was estimated that all bank customers would, within a period of 18 months, complete enrolment in the new system of customer identification. The enrollment for the scheme can be done in banks across the country. One of the most potent arguments advanced by banks for not extending enough credit to prospective credit customers in Nigeria has been the absence of credible identity system. Thus, it was agreed that the scheme would make access to credit easier for people especially the low income earners in the society, which include employees and entrepreneurs of Micro, Small and Medium Enterprises (MSMEs), students etc.

At the expiration of the estimated 18 months after the launch, empirical evidence showed that a good number of bank customers were reluctant and never took the exercise seriously. Thus, few days to the end of the mandatory 18 months, which was June 30, 2015, there was commotion and stampede in banking halls across the country, as customers were pushing, shoving and climbing on each other in order to beat the deadline for the BVN registration. This confusion necessitated the call for the extension of the registration dateline by four months to October 31, 2015.

About four weeks to the October 31, 2015 deadline set by the CBN for bank customers to register and obtain BVN, the Nigerian Interbank Settlement System Plc (NIBSS) has revealed that about 32 million of them were yet to do so.

Data obtained from the CBN and the NIBSS showed that out of about 52 million active accounts owned by adults and children in the various banks, the total enrolment for the BVN stood at about 20 million.

According to the statistics, out of the 20 million registered bank customers, only about 14 million accounts have been linked to the BVN as of September 2015.

This development was taking place in spite of the fact that the CBN had earlier given June 30, 2015 as the deadline for bank customers to register and obtain their BVN.

The central bank later extended the deadline to October 31 to enable all customers to obtain their BVN.

However, findings showed that after the initial rush between the end of June and July 2015, there had was a steady decline in new BVN enrolment figure for August and September.

Officials said many bank accountholders had continued to show apathy instead of taking advantage of the extension in period.

Given the development, there are indications that the last-minute rush experienced at various banking halls in June will be repeated if more customers fail to register over the next two to three weeks.

It is also expected that more bank accounts will be linked to the BVN over the next couple of weeks.

Already, the CBN has said there will be no further extension after the October 31 deadline.

This means that customers without BVN-linked accounts risk being restricted from normal operations of their accounts or free access to their bank account balances.

Ensuring the success of BVN

The BVN is now a mandatory requirement for opening new bank accounts. As a result, those affected by the restrictions are bank accounts, which were opened prior to the commencement of the BVN scheme.

While some people have argued that the bank customers have not been taking advantage of the extension to complete their BVN registration, and also ensure that their various bank accounts have been linked to the BVN, there are others who stated that the CBN and the banks have not done enough to make people comply with the directive on BVN.

While the information of BVN is only available to the customer via vague emails sent by the banks, there is presently no system to allow customers to send their BVN via any electronic or mobile channels to their banks.

Fears have been expressed that there will be a major shake-up within the banking industry at the end of October if threats hold to restrict defaulters of the BVN registration. Customers without the BVN will not be able to make transactions in and outside Nigeria as from October 31.

As some people are struggling to win the race against time, it is believed that millions of account holders who are yet to enroll for BVN will start engaging in panic withdrawals as the deadline approaches.

No doubt, the BVN initiative, while being yet another cumbersome attempt at Nigeria’s personal data management plans, remains commendable.

As part of the CBN’s cashless policy, the BVN initiative aims to capture data and check fraud in the banking system by giving every bank customer a unique identification number that can be verified across all banks in the country.

However, like most laudable initiatives in this country, the application has been faulted as customers who operate accounts in several banks are required to physically present their BVN to all the banks they operate with.

The argument put forward is that if the BVN is a centralised system that can be accessed by all banks, the banks should be able to check their customers’ details in the system to ascertain those who have registered and update accordingly rather than asking them to visit all their banks for BVN purposes.

Sensitisation, which has always been the bane of our reforms, is very poor especially in rural areas. Media reports state that a substantial percentage of the Nigerian banking population are still unaware of the initiative months after it commenced.

The CBN) and all commercial banks are therefore enjoined to take the BVN sensitisation drive to rural communities.

It is necessary to increase the level of awareness given the low level of the awareness of the BVN registration in rural communities.

If this is not done urgently, many Nigerians who resided in the rural areas, and are not yet aware of the exercise, and the need to be captured, might not be registered before the October deadline.

To ensure that the aims of BVN registration are not defeated, banks and the CBN should create the needed awareness on the need for Nigerians to register.