Indications emerged yesterday that commercial banks have frozen about five million customers' active accounts over failure to enrol for the Bank Verification Number (BVN) .
A source told our reporter's that five million of the 52 million customers failed to adhere to the directives issued by the Central Bank of Nigeria and the Nigeria Interbank Settlement System Plc (NIBSS).
However, when visited some of the banks in Lagos, Abuja there were commotion and stampede in as customers said complained they were denied access to their accounts.
Meanwhile, stakeholders in the industry affirmed that the exercise would curb 10, 612 fraud cases.
The cases of fraud recorded last year showed an increase of 183 per cent, amounting to N25.61 billion, according to data from the Nigeria Deposit Insurance Corporation (NDIC).
Experts said, however, highlighted the various benefits of the BVN projects.
According to the Managing Director/CEO of NIBSS, Fola Shonubi, the BVN initiative, by helping banks to identify and blacklist fraudulent customers, will help to boost retail credit in the banking industry. The NIBSS boss, who is responsible for the implementation of the BVN, in a statement, explained that once banks are able to identify and blacklist fraudulent customers, they would be encouraged to extend loans to those customers that are credit worthy and do not have any record of being delinquent borrowers.
Shonubi said: "When the BVN project came up, there were three key things. First and most important of all is for us to identify our customers and to identify them uniquely across banks and across accounts. So, once you have BVN, even if you have 10 bank accounts, it is the same BVN that will be tied to the bank accounts. Now, relating to identifying is the possibility of banks blacklisting people who have committed financial infractions.
The Head of Research in Sterling Capital, Sewa Wusu, stated that the BVN gives protection to all banks customers to as to ensure unauthorized access to their account.
According to him, this means that fraudulent activities including identity theft will be reduced to the barest minimum.
"Another benefit is the ability of CBN to ascertain the overall financial system data in terms of numbers of customers or account holders, types of accounts, geographic spread among others which will enable proper planning and deployment of other regulatory functions to ensure stability.
"The BVN will also help to fast tract transaction processes across the financial system, thereby ensuring efficiency of banking operations as a whole. Other economic usage can also be derived from the BVN data to promote certain socio-economic issues that affects the citizens in terms of demographic and gender spread in the financial system.
"The BVN can also be linked to the national identity card which will ensure enough transparency in all financial transactions of an individual in the country," said Wusu.
For the Head of Reserve, Afrinvest, Femi Ademola the gains of the BVN would only be known with certainty after the deadline has passed and its use are enforced.
According to him, apart from the fact that is gives account holder a unique identity which can be used for identification in any Nigerian bank, it also links with the customers' credit history in all banks. It therefore protects the banks from additional credit exposure to blacklisted persons. However, the benefits of the BVN to individual customers in term of its operation is not yet clear.
He, however, questioned on the credibility, saying, "Will customers be asked for the BVN at any time of transaction (like using a TOKEN to complete an online transaction)? If somebody uses a debit/credit card to make purchases, will you have to supply the BVN to complete the transaction? If not, how will be different from card PIN and Token that we currently use. It appears that the biggest gain of the BVN may be in intelligence gathering on bank customers so as to prevent the use of multiple accounts with pseudo names for money laundering activities. So it is difficult evaluate the success of the exercise so far because of lack of statistics for now.
"Although most of the banks are still sending out SMS and emails to remind their customers of the coming deadline, it is not enough to determine the success of the exercise. What will give us an idea of the success rate is what happens after the deadline at the end of the month. If the deadline is shifted, it may signify that the success rate is low."
He further stated, "It is a pity that some customers have fallen victim of internet fraud by sharing their banks details with fraudsters, the banks also constantly warn their customers to be careful of such situations. However, I think the issue with capturing the data for Nigerians in diaspora is a very valid one. It is not economical feasible for this people to come to Nigeria because of the BVN exercise so that they can keep using their accounts. Although some banks have been ingenious enough to open BVN capture centres outside of the country, they can't and have not been able to cover all the people in all locations.
"I think the banks, spearheaded by the CBN (or NIBSS) should create a platform where customers can register for BVN on secured website. That would make the exercise to record a greater level of success. The CBN may also consider extending the deadline to the end of the year so that several Nigerians abroad who would come home for the festive season may also be captured."
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