Managing BVN Challenges On Nigerians

Managing BVN Challenges On Nigerians“The challenge for banks isn’t becoming digital, it is providing values that is perceived to be in line with the cost or better yet, providing values that consumers are comfortable paying for”-Ron Shevlin

The position of Shevlin above describes the Nigerian situation with its BVN policy which appears not to fully define the ameliorations to the nation’s banking industry challenges.

The Central Bank of Nigeria (CBN) through the Banker’s Committee and in collaboration with all banks in Nigeria on February 14, 2014 launched a centralized biometric identification system for the banking industry tagged Bank Verification Number (BVN).

The Bank Verification Number, BVN, is a unique identification number for all Bank Customers within the Nigerian banking industry.

The introduction of BVN is as a result of increasing incidence of compromise on conventional security systems such as password, Personal Identification Number and the need to address existing challenges with identity management.

The BVN is aimed at achieving  such objectives as to: Protect Customers, Bank Accounts from unauthorized access; Address issues of identity theft, thus reduce exposure to fraud; Enhance the Banking Industry chances of being able to fish out blacklisted customers.

It advantages cannot be overemphasized as the BVN project requires individuals performing banking transactions (e.g. Account opening, applying for loans) to identify themselves using their biometric features which will be matched against information in the central database. The aim of this approach is to protect customer’s bank accounts from being accessed by a person who is not the customer.

It requires individuals who are signatories to corporate accounts to enroll and be linked to their corporate account hence beneficial owners of corporate account can easily be tracked and identified.

It enhances the banking industry’s chances of being able to fish out customers who have been blacklisted by the CBN for not paying back loans or people who might have contravened financial system regulations.

BVN is accepted as a means of identification or as an additional identification procedure across all banks in Nigeria and also prevents unauthorized access to accounts as BVN verification are being carried out at point of banking transactions.

Through an enhanced biometric real-time security system, the danger of unauthorized access to customer’s bank account is brought under check.
Know Your Customer (KYC) BVN aids KYC policy of the CBN consequently fraudulent activities are being curtailed and banking activities are routinely monitored. BVN is a great initiative that would reduce illegal banking transactions and improve national financial intelligence gathering which will boost the economy.

In a chat with MMS Plus, High Chief Oyebisi Bamgboye, an experienced banker, financial expert and a customer service manager in Ecobank observed that despite the advantages above, the BVN policy is still confronted with some challenges.

According to him ”it has kept a lot of the unbanked and illiterate Nigerians out of the banking system due to issues like disparity in names, age and other sundry issues which they hitherto do take for granted or do not know. These classes of Nigerians prefer the use of traditional thrift societies or various unorthodox means to safe their funds. Consequently keeping such funds out of the financial system.”

The implication on banks cannot be downplayed because Nigerian banks are still battling with the attendant effects of TSA, recession with loss of jobs prevalent in the industry.

Chief Bamgboye opined that forfeiture order will definitely compound the problem with forfeited funds being moved to CBN and the resultant low remittances from abroad that will follow.

The banks will not also be able to support and keep the economy afloat if the decision is not carefully implemented.

Again, the effects on Nigerians in diaspora would include: reduction in diaspora remittances; Mandatory BVN for all account holders meant that Nigerians in Diaspora will need to do more to enroll on BVN platform in order to forestall forfeiture of their savings to the federal governments which will consequently lead to reduction in new Diaspora remittances coming into the country.

Presently BVN enrolment centers are not available in all countries of the world. Therefore, Nigerians and other nationals with active accounts in Nigeria will need to either come to Nigeria for enrolment or travel to any of the 12 countries; Netherlands, USA, UK, New Zealand, Malaysia, China, Turkey, Australia, Brazil, France, Italy And South Africa where enrolment is available.

There are Nigerians abroad who cannot afford to come home to do their BVN due to lack of legal travel documents and the government may not be able to force such people to come home.
The question is: will such Nigerians lose their life savings to the government or will they come home without hope of returning to their work abroad with no prospect of getting alternative job in Nigeria?

Again, Nigerian students and professionals abroad who may not be able to travel to enrolment centers, countries or even come home due to their educational or work commitment will be negatively affected by this forfeiture order.

In conclusion, the decision has been greeted with divergent views while some people expressed excitement that it is a positive development that it will prevent use of proxies to loot public funds whileothers believed it is ill-advised and would weaken the nation’s economy.

Therefore Nigerian government will need to look at the two sides of the coin very well and take the decision with caution so that Nigeria and Nigerians will not be the ultimate losers.

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