BVN: The Newest Requirement For Bank Loans: By next year, every customer of a Nigerian bank is expected to have a Bank Verification Number (BVN) and recently, the CBN has made the personalised number a prerequisite for obtaining loans in the financial industry. BUKOLA IDOWU examines the essence of the BVN and other issues around the biometric registration It has been nine months into the launch of the Bank Verification Number project embarked upon by the Central Bank of Nigeria and the Bankers Committee, and deposit money banks are still wooing their customers to register on the biometric identification scheme. Things must, however, speed up now with the latest deadline given by the CBN. Recently, the apex bank issued a circular titled “Clarification Circular on Bank Verification Number (BVN) Enrollment,” to all deposit money banks in the country, listing new deadlines and guidelines. Although the initial deadline for the registration of existing customers had been slated for March 2015, the CBN is taking proactive steps in ensuring that compliance rate is fast tracked. According to the circular which was signed by the director, Banking and Payment System department of the CBN, Dipo Fatokun, banks are to ensure that four out of every 10 of their customers (40 per cent) registered and obtained the BVN before the end of the year. Most importantly, new loans cannot be secured from any bank without the BVN with effect from Monday, November 3, 2014 while credit customers are under compulsion to have BVNs by the end of the year. Aimed at revolutionising the payment system in the country, the BVN captures bank customers’ biometrics, which are electronic verification tools for online and mobile banking that offer unique customer identification, giving unchangeable identification that helps in Know Your Customer (KYC) policy of the CBN. Bank customers are expected to walk into the banking halls and have their biometrics which include facial image and print of all 10 fingers to create a unique identity and attached number to the customer. The unique identity created cuts across the banking industry and the customer has just one identity not withstanding how many banks or accounts such customer uses. This means that the customer has to register only once no matter how many banks he or she uses. The introduction of BVN is targeted at addressing cyber crime, ATM fraud and other kinds of financial frauds as well as safeguard customers’ funds to avoid losses through Personal Identification Numbers (PIN). Aside this, the BVN will also strengthen the current KYC guidelines and allow banks have more confidence in giving out loans. With the BVN, the financial history of a customer is stored in a central location and can be accessed by other banks who seek information about that customer. Basically, it will partly perform the functions of the credit bureau, fishing out serial debtors. Credit bureaus are companies that collect information from creditors and available public sources on borrower’s credit history. They compile the credit information on individuals/entities regarding their credits, credit repayments, court judgments, bankruptcies amongst others and then creates a comprehensive credit record that may be sold to banks and other authorised users. With the BVN, credit history of customers who want to secure loans are made available to banks. Also, customers with suspicious accounts or transactions will be tracked with the BVN, making it difficult for fraudsters to maintain bank accounts. The CBN governor, Godwin Emefiele, who was previously the chairman of the Bankers Committee subcommittee on the project, in explaining the BVN stated that it would ensure that banks know who they are dealing with and therefore be more confident in giving out more loans. “With the BVN, we should begin to see the opening up of consumer credit opportunities, we are saying that with this project, and the kind of data that will be fed into the centralised system, it should be possible to access bank credit easily. Given the opportunity that we have right now, where the customers data and biometrics is given, then it makes it comfortable for us to say yes we can lend money to you. “Because we believe that given the opportunity to borrow once, you will perform and if you don’t perform, your information fed into the system turns you into what I call a criminal and then you will not be able to access credit again,” Emefiele had stated at the launch of the project in February this year. In his explanation, Biometric Project coordinator at the Nigerian Inter Bank Settlement System (NIBSS) where the database will be domiciled, Oluseyi Adenmosun said the BVN makes it, “possible for individuals performing banking transactions like applying for loans to identify themselves using their biometric features which will be matched against information in the central database at NIBSS. Also, update of customer information is done at their bank branches physically while lenders are prompted during account opening and credit check if a customer has been blacklisted by any lender.” The biometric data, which is captured, will also be a major tool in combating the ever increasing electronic fraud. With the rise of electronic banking, banks, their customers and the regulatory bodies have had to battle the increase in electronic fraud. The unique identity which the BVN gives the customer is expected to mitigate the cases of fraud. According to NIBSS managing director, Ade Shonubi, the BVN enables each individual to have one identification within the financial system and gives each customer maximum protection and security of transactions. Corroborating this, Adenmosun stated that the BVN gives a unique identity that can be verified across the banking industry making it easier for customers’ bank accounts to be protected from unauthorised access. It is expected to address issues of identity theft, and reduce exposure to fraud in the banking sector. He further stated that the BVN will allow a second level of protection of customers using their cards for transactions as automated teller machines (ATMs) and point of sale terminals (POS) based transactions will be authenticated with the biometrics, thus reducing the rate of card based fraud. Adenmosun said though there was no perfect system, the essence of technology and safety measures was to frustrate fraudsters. He said the BVN would make it extremely difficult for the fraud perpetrators to succeed. “It will not completely eliminate fraud, but it will cut it to the barest minimum. The biometrics cannot be easily stolen because it is based on fingerprints,” he said. Although, banks have continued to send email and text messages to their customers on the need to have their biometrics captured for the BVN, more is needed to be done in terms of publicity and education of customers. The new policy was kicked off in Lagos in March this year and by March next year, banks are expected to start barring customers without biometric registration numbers from carrying out certain transactions. The CBN had earlier stipulated that by March next year, “transactions valued at N100 million and above should only be allowed for customers with the BVN; (this includes, but not limited to money transfers, loans, contingencies etc.); that by June, all bank customers should have the BVN. Any bank customer without the BVN will be deemed to have inadequate Know Your Customer.” With the latest circular, transactions below N100 million will also require BVN to be executed as banks will strive to ensure that 70 per cent or more of their customers have BVN before the March 30, 2015 deadline. The CBN, in ensuring full compliance, has directed all deposit money banks to fully integrate their core banking system latest by October 31, 2014, to ease the enrollment, urging them to give more attention to the enrollment of their customers. To achieve this, some banks are offering their customers the option of enrolling on Saturday and in addition to making the enrollment easier for the customers, the CBN in its latest circular on the BVN directed that for existing customers capturing signature and photo identification document may not be necessary as the bank is expected to have those records during account opening. Also, the CBN directed that “where an existing customer wishes to register the BVN with his/her bank, Where an existing customer wishes to do a change of name after his/her enrollment on the BVN, due diligence should be exercised and appropriate legal documents obtained before the change is effected.” Although the awareness has continued to rise amongst customers, some customers, though aware of the BVN registration due to the text and email messages being sent by their banks, say they do not know why they need to register. Likewise, some had attached religious sentiments to the BVN and are advising others to disregard it, while some see it as another government policy aimed at ripping off the masses and invading the privacy of the citizenry. One customer lamented that it took him two week to register, explaining that most of the time when he went into the banking hall, “it’s either the platform is down or the biometric device is not working.” Having in mind the fact that some Nigerians hold accounts in several banks, another customer wondered how the data received from one of her banks would be synchronised with her other accounts. At the point of data collection, the customer is not asked if he or she holds accounts at any other banks. The new generation bank’s customer wondered if he would encounter same problem if in the future he wants to make a transaction that is biometric based, even as he complained of the duplicity of registration ongoing in the country presently. When asked, Adenmosun assured that the data would be synchronised notwithstanding the different names used in opening the account. He noted that as long as the accounts are being held by the same person, the data is captured only once and only one BVN is given. He noted further that the system based in NIBSS would detect and send out an alert if data for one individual is entered more than once. At the moment, aside the BVN, Nigerians, especially Lagos residents have to have their data and biometrics captured for the national identity card scheme as well as the Lagos residents registration amongst others. Original link Read More goo.gl/UKPk9o (y) ✍comment ☏share
Posted on: Sat, 08 Nov 2014 21:29:49 +0000
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