Court order on BVN: Bank legal teams hold emergency meeting Tuesday

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GODWIN EMELIFE, CBN GOV.

Company secretaries and legal teams of 19 Deposit Money Banks in the country will on Tuesday October 24 2017, hold an emergency meeting to fashion out modalities to comply with the court order directing commercial banks to freeze bank accounts without the Bank Verification Number (BVN) and publish names and details of the customers

The Federal Government on Wednesday last week secured an interim forfeiture order from Federal High Court which would now allow it to freeze the accounts of bank customers in Nigeria who have no Bank Verification Number, BVN.

The order obtained before Justice Nnamdi Dimgba of the Abuja division of the court gave the Federal Government the nod to instruct the banks to disclose any investments made with these funds and to freeze any outward movement from these accounts.

The court order mandates the Central Bank of Nigeria (CBN), to appoint an examiner to examine the books of any commercial bank that fails to comply.

This court order may affect over 15 million bank accounts with deposits running into billions of naira as, according to the Nigeria Inter Bank Settlement System Plc (NIBSS), the organisation saddled with registering bank customers for BVN, out of the 45.85million bank accounts in the country, only 30,511,506 had been issued with BVN numbers as of October 8, 2017.

Through the order, the Federal Government is seeking: Names of accounts without BVN; Account Numbers; Outstanding balances; Domicilary accounts without BVN; Branch/locations where these accounts are domiciled.

The order also empowers the government or any agent it applies to advertise the accounts without BVN in a widely circulated newspaper and gave a period of 14 days for the account holders to claim ownership and give a tangible reason why the funds should not be forfeited.

An industry stakeholder, Mr. Johnson Chukwu, lauded the policy but said there was a need for the Federal Government to give more time to enable rural dwellers to comply with the BVN requirement.

According to him, most of the learned customers have complied, and the majority of those who have yet to comply are illiterate people dwelling in the rural places.

He said the CBN needed to communicate through local languages in order to get the rural dwellers to comply.

“Another category of people who have not complied are those who opened the bank accounts with fictitious names, or those who got their money through illegal or criminal proceeds and would not want to come up to claim ownership of such accounts. These people constitute the highest amount in terms of the value of the money,” he said.

Some bank officials said there were certain accounts that the banks could not link up due to names mismatch.

It would be recalled that the Acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, recently raised the alarm that some banks were helping corrupt government officials to operate secret accounts without BVN.

While delivering a lecture at a workshop organised by the Chartered Institute of Bankers of Nigeria in Lagos, on September 26, 2017, he said some bank officials were in the habit of “opening accounts for government officials even after the introduction of the Treasury Single Account (TSA), thereby allowing government funds to be diverted.”

In his words: “There are several bank accounts that are not linked to BVN and are still active.”

Similarly, the CBN had last week, in a memo signed by Mr. Dipo Fatokun, Director Banking and Payment System, directed all banks to properly capture customers’ BVN data and ensure that a customer’s names on the BVN database are the same in all of his/her accounts, across all banks.

In the memo entitled the ‘‘Regulatory Framework for BVN and Watch-list Operations in Nigeria,’ the CBN said this became necessary to forestall fraudulent activities of bank customers.

The framework stated that “change of customer records shall be allowed as follows: Name change with supporting documents, subject to a maximum of twice a year; change of date of birth shall be allowed only once with supporting documents; minor correction due to errors supported with valid means of identification.”

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

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