CBN probes bank customers’ enrolment in BVN

* MPC keeps interest rate at 14%

The Central Bank of Nigeria (CBN) is probing banks’ enrollment
of their customers in the Bank Verification (BVN) platform to
ensure the integrity of the process, The Nation learnt
yesterday.

The BVN gives a unique identity across the banking industry to
each customer of Nigerian banks. But many banks are breaching the
BVN enrolment process.

In some cases, customers BVNs are attached to wrong accounts due
to improper validation. The practice, if not addressed, could
present serious identity crisis in the financial system.

Besides, some banks are not submitting names of their customers
identified through their BVNs to be involved in suspected
fraudulent activities to the apex bank as required by
regulation.

The CBN had directed banks to establish a database of their
customers identified through their BVNs to be involved in confirmed
fraudulent activities.

The directive is contained in the Regulatory Framework for BVN
Operation and Watch-list for Nigerian Financial System released by
the CBN. The framework is in exercise of the powers conferred on
the CBN, by Sections 2 (d) and 47 (2), of the CBN Act, 2007, to
promote the development of efficient and effective payments systems
for the settlement of transactions.

The watch-list comprises a database of bank customers’
identified by their BVNs, who have been involved in confirmed
fraudulent activity in the banking industry.

Confirming the development, Principal Manager, Banking and
Payment System Department of the CBN, Olubukola Akinwunmi, said
identity theft is a serious challenge that needed to be tackled in
the industry and needs the collaboration of all stakeholders.

He said the apex bank is currently auditing the BVN process in
banks ‘to ensure system integrity’.

According to him, banks were aware of the ongoing audit exercise
and that at the right time, sanctions will apply to culpable
lenders.

AkinwunmI, who represented CBN Director, Banking Service
Department, ‘Dipo Fatokun, at the Access Bank Anti-Fraud Week
Stakeholders’ workshop held in Lagos, spoke yesterday.

On how banks are culpable in identity theft, he said: “I think
the clarity I want to give to this is that banks have the
responsibility to enroll their customers. And they also have the
responsibility to ensure that when a customer comes to enroll on
the BVN platform, they do the necessary verification for that
exercise. Those are areas banks need to improve on their controls
to ensure that appropriate steps are taken and customers are
properly validated before they get the BVN.

On BVNs not matching account holders, he said: “That is
something that banks are in charge of reviewing their accounts
regularly and ensuring that their data is clean. So, it is a
regular cleansing activity that banks do.

“The banks have really done so well in terms of collaboration.
We have the industry fraud desk on collaborating to address issues
of fraud especially those related to identity theft, internet fraud
and all that.

“The CBN is tackling the issue of identity theft seriously. In
the industry, collaboration is the key word. No single individual
or institution can do it alone. The banks are collaborating with
the Central Bank.

‘Beyond that, the banks are also collaborating with other
regulators such as the Nigerian Communication Commission, on the
issue of SIM Swap that we have seen in the industry in recent past.
We have joint technical committee and memorandum of understanding
to address certain issues that will help us tackle the
problems.”

On banks not doing enough to blacklist watch-listed customers,
he said: “It takes a while to actually finalize investigations. So,
what we do is to ensure that banks are encouraged to do the needful
as soon as possible in order to conclude investigation.

“You cannot just pick on anyone without being sure of your
facts. The process of determining who should be watch-listed for
fraudulent activities or not may take a while. But notwithstanding,
we have continued to encourage banks to expedite action on some of
these issues in order to have a conclusive issue on any account
that may be related in any way to fraudsters or might have received
a fraudulent posting. So, banks are working to ensure they expedite
their investigations in order to do the needful in terms of watch
listing.

“Now, banks have been very responsive to issues, or any
initiative to arrest the malaise. So, we expected that this will
continue to trend downwards. In the past two years, you will see
that fraud in electronic banking has been on downwards trend.”

Executive Director, IT and Operations at Access Bank Plc, Ade
Bajomo, said that tackling e-fraud is a collective responsibility.
“What I can say is that no-one should be relaxed on this matter.
All of us need to be vigilant, and where we see fraud. It has to be
a zero-tolerance approach.

“This is about sharing information. If you know someone is a
criminal and you keep quiet, then that criminal will carry on
perpetrating crime. The moment we criminalize that criminal, then
the crime stops. This is no brainer. I can only urge all the banks,
that have to participate in this watch list process to ensure they
actively participate and they do what they need to do to make sure
the whole system is as secured as possible.”

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