The Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami (SAN)
THE Federal Government has taken steps to take over bank accounts without Bank Verification Number (BVN) as a Federal High Court sitting in Abuja has frozen all such accounts by stopping all outward payments, operations or transactions.
The court order may affect over 15 million bank accounts with deposits running into billions of naira as, according to the Nigeria Inter Bank Settlement System Plc (NIBSS), the organisation saddled with registering bank customers for BVN, out of the 45.85million bank accounts in the country, only 30,511,506 had been issued with BVN numbers as of October 8, 2017.
The Attorney-General of the Federation, Mr Abubakar Malami (SAN), had instituted an application seeking for an interim order directing all commercial banks in the country to disclose all individual and corporate accounts in their custody not covered by BVN.
The court, presided over by Justice Nnamdi O. Dimgba, gave the interim order in Suit no: FHC/ABJ/CS/911/2017 to all money deposit banks to disclose all bank accounts that are not linked with a BVN, declare the account numbers of such acounts, the branch in which the accounts are domiciled as well as the outstanding balances and advertise same in a widely circulated newspaper within seven days while giving owners of the account 14 days to identify themselves, failing which the funds in such accounts would be forfeited to the Federal Government.
The court, in an ex parte motion, said it gave the order because running a bank account without a BVN is “contrary to Section 3 of the Money laundering Act 2011 and CBN guidelines.”
The government has been concerned that its move to unveil those hiding stolen funds in the banks was being frustrated by bank officials colluding with them by allowing them to run accounts without BVN.
Recently, the Acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, raised the alarm that some banks were helping corrupt government officials to operate secret accounts without BVN.
While delivering a lecture at a workshop organised by the Chartered Institute of Bankers of Nigeria in Lagos, on September 26, 2017, he said some bank officials were in the habit of “opening accounts for government officials even after the introduction of the Treasury Single Account, thereby allowing government funds to be diverted.”
According to him, “There are several bank accounts that are not linked to BVN and are still active.”
Similarly, the CBN had last week, in a memo signed by Mr Dipo Fatokun, Director Banking and Payment System, directed all banks to properly capture customers’ BVN data and ensure that a customer’s names on the BVN database are the same in all of his/her accounts, across all banks.
In the memo entitled the ‘‘Regulatory Framework for BVN and Watch-list Operations in Nigeria,’ the CBN said this became necessary to forestall fraudulent activities of bank customers.
The framework stated that “change of customer records shall be allowed as follows: Name change with supporting documents, subject to a maximum of twice a year; change of date of birth shall be allowed only once with supporting documents; minor correction due to errors supported with valid means of identification.”
According to the CBN framework, a watch-listed individual shall not be allowed to enter into new relationship with any bank.
The court also ordered that the banks “should disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and other relevant information related to the transactions made on the accounts.”
The CBN, had in conjunction with the Bankers Committee, embarked upon the deployment of a centralised BVN system and launched the project in February 2014 as part of the overall strategy to ensure effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system. The BVN gives a unique identity across the banking Industry to each customer of Nigerian banks.
