CBN Issues Revises Regulatory Framework For BVN Operations

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The Central Bank of Nigeria (CBN) has issued a Revised Regulatory Framework for Bank Verification Number (BVN) Operations and Watch-List for the Nigerian banking industry. It said the move is in line with its objective of promoting financial system stability.


It has also issued guidelines on disposal of non-permissible income.

According to a circular dated October 12, 2021 and endorsed by the Director, Payments System Management Department, Musa Jimoh, the apex bank said the framework would enhance the effectiveness of customer due diligence and Know Your Customer processes as part of the overall strategy for promoting a Safe and efficient banking and payment system, adding that it would continue to monitor industry developments and issue further guidance as may be appropriate.

“The Central Bank of Nigeria, in collaboration with the Bankers’ Committee, deployed a centralised Bank Verification Number (BVN) System in February 2014. This is part of the overall strategy of ensuring effectiveness of Know Your Customer (KYC) principles, and promotion of safe, reliable and efficient payments systems. The BVN system gives each customer in the Nigerian banking industry a unique identifier number.

“This framework defines the operations of BVN, as well as the establishment and operations of a watch-list for the Nigerian banking industry to address increasing incidence of frauds and to enhance public confidence in the industry.

“This framework, without prejudice to existing laws, is a guide for the operations of the watch-list in the financial system. The watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches, as defined within the framework,” the bank said in its introductory statement.

In a circular dated October 13, 2021, which was addressed to all non-interest financial institutions and signed by the  Director, Financial Policy and Regulation Department, Chibuzo A. Efobi, the bank announced guidelines on the disposal of non-permissible income.

Part of the circular read: “Non-Permissible Income is any income that accrues to the institution in a Shari’ah non- compliant manner, such as interest income, penalties for delayed payment of debt obligations, or any income declared by the ACE of the institution as impermissible according to the Shari’ah.”

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