Controversy trails BVN deadline over frozen accounts

…As CBN insists on registration

By CHIOMA OBINAGWAM

THE news of the October 31, 2015 deadline for the Bank Verification Number(BVN) enrollment exercise was greeted with much controversy from bank customers, particularly those whose accounts where frozen for non-compliance to the BVN directives instituted by the Central Bank of Nigeria, Nigeria’s apex bank before the deadline.
Investigations conducted by National Daily showed that no fewer than five million Deposit Money Bank(DMB) customers were unable to withdraw cash and transfer funds through Automated Teller Machines(ATM), Internet banking platforms and over-the-counter in the banking halls.
A significant number of the affected bank customers who visited the banks in droves, claimed they had already enrolled for the BVN at banks other than where their accounts where domiciled, were barred for failure to visit their banks to link the number up with their accounts.
Mr. Boniface Okezie, the Chairman of Progressive Shareholders Association of Nigeria (PSAN) lamented the plight of his son at a school in Oyo, who could not access his account for similar reasons.
The PSAN boss further describes the BVN initiative as irrelevant.
In his words: “I have not seen the benefits of this initiative. It is another way of wasting our resources. Since the bank already engages in Know Your Customer (KYC) exercise before an account is opened, it practically makes the BVN initiative irrelevant.”
He is also of the opinion that the CBN will not be able to check the menace of fraud through this medium as long as a customer’s BVN is exposed to a third party.
“The BVN is supposed to reside in banks. It is not supposed to be for third party. For instance, when you want to do something like insurance you are requested to provide your BVN. If you keep exposing your BVN you can be swindled,” he continued.
From the tone of the Mr. Okezie, among many bank customers and Nigerians, there is no doubt that a lot of Nigerians are still in dark regarding the benefits of BVN.
BVN is an initiative by the CBN in collaboration with the Bankers’ Committee, introduced on February 14, 2014 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.
More so, BVN has been described as a great initiative with vast opportunities.
Its major objectives include but not limited to, protecting bank customers, reducing fraud and strengthening the Nigerian banking system.
A recent survey conducted by the Nigeria Inter-Bank Settlement System Plc (NIBSS) showed that 20,833,635 bank customers have enrolled as at October 25, 2015.
Going by this figure, it will be safe to imply that the five million customers whose accounts were frozen represent 24 per cent of the total number of enrolled customers.
This means that 15,833,635 or 76 per cent of BVN enrolled customers can access their accounts; an indication the apex bank is making progress in its initiative.
However, the National Deposit Insurance Corporation (NDIC), recently reported that 65 per cent or 116.35 million of the about 179 million Nigerians still lack access to any form of banking facility or service.
This daunting figure is enough indicators that the CBN in trying to sanitise the system should not discourage the few Nigerians who have access to banking facilities from engaging in the process through the BVN hiccups.
Reacting further on the issue, Mr. Okezie suggests that the BVN exercise should be on-going and not pegged by a deadline.
He argued that Nigerians have a right to access their accounts and if they are barred might challenge the exercise at the Court of law.
Nevertheless, reknowned Nigerian economist, Henry Boyo stated that there was no need for Nigerians to panic over the issue since they have not been completely banned from the process.
“It is not as if they have been banned from banking. There is a process. They can open a new account and transfer this to the account. There should not be panic. It is just that there might be a lot of people at the bank,” he explained.
Looking at the impact of the suspension of these accounts, Mr. Tony Mordi, Senior Stockbroker and Analysts at APT Securities said:”It is going to be a momentary impact. I don’t think it would have any medium to long-term effects.”
Mordi, who is optimistic of the initiative, said that it would improve transparency in the banking system and would make the work of auditors a lot easier since every transaction can be easily detected.
He, however, noted that the implementation of the BVN would mean bad news to kidnappers, who usually take ransome from their victims with false identity.
Corroborating, the President of Renaissance Shareholders Association of Nigeria, Olufemi Timothy, commended the CBN for the initiative and stated that the apex bank had allowed enough time for the BVN registration.
He disagreed that the process should be on-going stating that it would hinder the development of the initiative to the subsequent phases.
“CBN has allowed enough time for people to register. Nigerians characteristically are known for not taking issues like this seriously. The main purpose is to have a universal account number. There should be deadline so that the Universal Account number can be achievable,” he argued.
When the universal account number is achievable, Timothy noted, the accurate number of bank customers can be captured in the world data base.
Meanwhile, the CBN through its spokesman, Ibrahim Muazu recently said the process will still go-on and the deadline means that any customer that fails to do the registration will have some restriction to operate his accounts.
Mu’azu said the deadline was just to achieve a primary aim of creating more awareness about the exercise.
He said: “Deadline was successful because the awareness has been created to millions of customers and the banking halls were empty unlike the June deadline where there was chaos everywhere in the banking halls.”
However, the CBN announced the extension of BVN enrolment for Nigerian Bank customers in diaspora to January 31, 2016 to enable them complete the registration exercise and the attachment of the BVN to their bank accounts.
Although significant success has been made in the BVN, there is no gain saying that the CBN still needs to do a lot more in the area of enlightenment of the banking populace and Nigerians in general.