1st December, 2023
By Kazeem Ugbodaga
The Central Bank of Nigeria (CBN) says all bank accounts without Bank Verification Number (BVN) and National Identity Number (NIN) will be placed as ‘Post No Debit’ with effect from April 2024.
“Post No Debit” is a term used to describe a restriction imposed by banks on specific accounts, preventing customers from making withdrawals, transfers, or any other debits from their accounts.
This measure effectively freezes the funds in the account, rendering it inaccessible for the duration of the restriction.
The CBN, in a circular jointly signed by the Director, Payments System Management Department, Chibuzo Efobi, and Director, Financial Policy and Regulation Department, Haruna Mustapha, said the move was part of its efforts in promoting financial system stability.
The apex bank said it becomes necessary to strengthen the ‘Know Your Customer’ procedures in financial institutions under its purview.
“Accordingly, the CBN hereby issues an amendment to Section 1.5.3 of the Regulatory Framework for Bank Verification Number Operations and Watch List for the Nigerian banking industry.
“In this regard: it is mandatory for all Tier-1 bank accounts and wallets for individuals to have BVN and/or NIN. It remains mandatory for Tiers 2 & 3 accounts and wallets for individual accounts to have BVN and NIN.
“The process for account opening shall commence by electronically retrieving BVN or NIN related information from the NIBSS BVN or NIMC’s NIN databases and for same to become the primary information for onboarding of new customers,’ the bank said.
According to the CBN, all existing customer accounts/wallets for individuals with validated BVN shall be profiled in the NIBSS ICAD immediately and within 24 hours of opening accounts/wallets.
The circular added that effective immediately, no new Tier1 accounts and wallets should be opened without BVN or NIN, saying that for all existing Tier1 accounts/wallets without BVN or NIN, effective immediately, any unfunded account/wallet shall be placed on “Post No Debit or credit until the new process is satisfied.
“Effective April 1, 2024, all funded accounts or wallets shall be placed on “Post No Debit or Credit, and no further transactions permitted.
“The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024,” the bank stated.
The apex banks said to ensure uniform and full compliance, the Executive Compliance Officers, Chief Compliance Officers, or Heads of the Compliance Functions were advised to acquaint themselves with the attached Guidance Notes which becomes applicable to all institutions regulated by it.
It said a comprehensive BVN and NIN audit shall be conducted shortly and where breaches were identified, appropriate sanctions shall be applied.
The CBN said all financial institutions regulated by it, were required to apply strict compliance on restrictions on Tier1 accounts/wallets as they relate to limits on transaction values and cumulative balances.