CBN orders Microfinance banks to freeze accounts with no BVN

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The Central Bank of Nigeria (CBN) has instructed microfinance banks and other financial institutions to place a no debit order on bank accounts with no Bank Verification Number (BVN).  Credit lodgments can be placed in such accounts.

The Post No Debit instruction will only be removed when the customer presents a BVN or enroll for the BVN registration.

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

BVN is issued after biometrics details of a bank customer have been captured.  Know Your Customer (KYC )requirements are a means of identification and proof of address required before customers can operate or open a bank account.

The Federal Government in October last year approached a federal high court for an interim forfeiture order of funds in bank accounts with no BVN (Bank Verification Number) or incomplete KYC (Know Your Customer) requirements in commercial banks. Banks and their customers have however kicked against the move.

The court has since modified the order, allowing access to bank accounts once BVN’s have been regularized or enrolment carried out. About thirty million people have enrolled for BVNs so far.

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