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Central Bank of Nigeria (CBN) to Close Bank Accounts Without BVN The CBN has announced its plans to close millions of bank accounts in various financial institutions that are not linked to a Bank Verification Number (BVN). CBN's Director of the Risk Management Department and Chief Risk Officer, Blaise Ijebor, announced plans to clean up the banking sector and reduce fraud at the Prembly Compliance Breakfast Dialogue on April 6. What is BVN? BVN (Bank Verification Number) is a crucial identification system that captures the biometric data of bank customers in Nigeria. It is designed to verify the identity of account holders and prevent fraudulent activities in the banking sector. BVN is a mandatory requirement for operating a bank account in Nigeria, and it is used to track and monitor all financial transactions linked to an account. Why is CBN Closing Bank Accounts Without BVN? According to a recent analysis by Piggybank.ng, the Nigerian Inter-Bank Settlement System (NIBSS) website shows that as of April 2, 2023, there are only 57.01 million registered BVN numbers out of a total of 191.4 million bank accounts in Nigeria. This means that a significant portion of bank accounts in the country are not linked to BVN. Out of the 191.4 million bank accounts, 133.5 million are active, which implies that there is a vast number of dormant accounts that may also lack BVN linkage. This gap between the number of registered BVN numbers and bank accounts is concerning as it provides cybercriminals with an opportunity to exploit vulnerabilities. Without BVN linkage, bank accounts can easily be compromised, and fraudulent activities can be carried out undetected. It is, therefore, crucial for account holders to ensure that their accounts are linked to BVN to protect themselves from potential cyber threats. CBN's Ijebor highlighted three areas where cybercriminals are exploiting vulnerabilities: Tier-1 Account: This account is dominated by digital banks or fintech firms and allows customers to open an account with minimal documentation, making it an easy entry point for hackers. Banks that do not meet regulatory requirements: Digital banks and some traditional banks may not meet regulatory requirements, potentially creating a second loophole for fraudulent activity. Exploitation of Vulnerabilities: Hackers can exploit any vulnerability to access bank accounts. CBN's Plan to Improve Agency Banking The CBN is currently working on improving agency banking and enabling agents to register BVN. This move will help transfer Tier-1 accounts to Tier-2, ensuring more customers have their BVN linked to their bank accounts, ultimately reducing the risk of fraud. Impact on Customers Customers who fail to link their bank accounts with their BVN risk losing access to their accounts as CBN plans to close such accounts. It is therefore advisable for customers to ensure that their bank accounts are linked to their BVN to avoid being affected by this exercise. Exchange Rate Adjustment The CBN may have made a slight adjustment to the official exchange rate of the Naira against the United States dollar, as per recent reports. The Naira has been trading at an all-time low against the dollar, above N463 since the start of Q2 2023, and on Wednesday, April 5, 2023, it depreciated against the US dollar across all foreign exchange markets.

CBN to Close Bank Accounts Without BVN

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