By Chinwendu Obienyi
In the coming weeks and months, Nigerians are likely to besiege commercial banks and the National Identity Management Commission offices and centers following the Central Bank of Nigeria (CBN)’s latest directive to financial institutions to halt transactions on all individual accounts or wallets without Bank Verification Number (BVN) or National Identity Number (NIN).
The apex bank disclosed this in a circular to all commercial, merchant, non-interest and payment service banks, other financial institutions and mobile money operators, noting that all individual existing and new tier 1, 2 and 3 accounts/wallets must have BVN or NIN.
The circular signed by the Director, Payment System Management Department at the CBN, Mr Chibuzo Efobi and Director, Financial Policy and Regulations Department, Mr Haruna Mustapha, noted that the mandate was part of the apex bank’s effort in promoting financial system stability which has led to its amendment of Section 1.5.3 of the Regulatory Framework for BVN Operations and Watch-List for the Nigerian Banking Industry (Guidelines).
The CBN’s circular also specified that existing unfunded individual Tier 1 accounts without BVN or NIN would be placed on “Post No Debit or Credit” immediately. “For all existing Tier 1 accounts/wallets without BVN or NIN: Effective immediately, any unfunded account/wallet shall be placed on ‘Post No Debit or Credit’ until the new process is satisfied.
Effective March 1, 2024, all funded accounts or wallets shall be placed on ‘Post No Debit or Credit’ and no further transactions permitted.The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.
It said that to ensure uniform and full compliance, the executive compliance officers, chief compliance officers or heads of the compliance functions are advised to acquaint themselves with the attached guidance notes which becomes applicable to all institutions regulated by the CBN. This current situation draws similarities with the unforgettable experience that came during the hunt for both old and new Naira notes which were scarce during the ill-implemented Naira redesign by former CBN helmsman, Godwin Emefiele.
Emefiele had in January, declared that the January 31, 2023 deadline fixed by the apex bank for the return of old N200, N500 and N1,000 banknotes will not be extended. He urged those who might still be holding on to the old banknotes to turn them in, assuring them they would not be harassed by the anti-graft agencies.
In a desperate attempt, customers filled up the banking halls of several bank institutions and as a result, the demand for the new naira notes outweighed the supply, leading to accusations that the apex bank had not printed enough new notes. However, Emefiele, accused bank MDs of sabotaging the policy, stating that they were colluding with top officials in government. His accusation came during the fact that the February and March 2023 general elections were close and so it felt like the politicians (who had insisted the policy should be extended) were holding on to the naira notes for their election campaigns.
Thankfully, the situation with the redesign policy has been dealt with as the Supreme Court, a few weeks ago, ruled that the old naira notes will remain legal tender till further notice. The CBN, in a statement backed the court’s ruling and directed banks to comply with the ruling to issue and accept old notes alongside the redesigned indefinitely.
Hence, with this latest directive to halt transactions on all individual accounts or wallets without BVN or NIN, economic experts who spoke to Daily Sun, said this would lead to a rush by desperate customers to regularise their accounts in the coming weeks and months.
They also added that this would put a lot of pressure on employees to register the customers for the BVN, while the National Identity Management Commission offices and centers would face a similar situation for the NIN registration.
Analysing data obtained from the Nigeria Inter-Bank Settlement System (NIBSS), Daily Sun observed that the banking industry recorded 59 million (58,999,262) BVN counts as of October 9, 2023. It will be recalled that the total number of bank accounts in the country as of 2021 was 191.4 million, out of which 133.5 were actively in use. It is expected that the figure on the total number of bank accounts would have risen as of today due to the rising population.
David Adonri, the Chief Executive Officer, Highcap Securities and an economic analyst, noted that even though the apex bank means well for the banking industry, the directive is likely to increase pressure on banks and the NIMC centers.
“I think the issue started with some Nigerians who have basically over the years ignored the calls for them to link their BVN to their bank accounts. I know that directive was given in 2014 or 2015 but surprisingly, we still have some accounts that remain un-linked. Some of these accounts have been either closed or remained dormant. So some of the accounts that are yet to be linked will see their owners swarming round the bank branches to beat the deadline rush.
But in truth, these banks will struggle as I learnt that they are short-staffed. I also think this is the situation with the NIMC as the COVID-19 pandemic really caused harm as many of these employees lost their job”. A bank staff who spoke on the condition of anonymity, said the directive would mean that the management would likely to extend the working hours for its employees and might consider working on Saturdays and Sundays to clear the backlog.
This, he noted, would put pressure on the already stressed employees, who are dealing with low income salary and the rising cost of food prices in the country and additional responsibilities ahead of the Christmas and New Year celebration.
“This is honestly coming at the wrong time for us and it would even be a frustrating one considering that some of us have not even gone on leave. We are already dealing with the rising cost of transportation, food and fuel. If the bank would pay for extra services as regards this development, then there will be motivation to work but as it stands, it is crunch time for us at the moment”.