The Central Bank of Nigeria (CBN) has disclosed its plan to close millions of bank accounts in several financial institutions that are not linked to a Bank Verification Number (BVN).
The CBN director, Risk Management Department and Chief Risk Officer, Blaise Ijebor disclosed this at a Compliance Breakfast Dialogue on Thursday 6th April 2023.
He stated further that the objective is to clean up the sector and reduce the growing incidences of fraud.
The CBN introduced BVN to check fraud in the banking system and it is a unique identifier that captures the biometric data of bank customers. It is used to verify their identities and prevent fraudulent activities.
Speaking further, Ijebor stated that the financial regulator was looking at commencing the exercise soon, but did not give a precise time the CBN would begin the clean up.
Detailing the importance of closing bank accounts without BVN, Ijebor highlighted three areas where cybercriminals are exploiting the vulnerabilities.
The first is the Tier-1 account, which allows customers to open an account with minimal documentation and is mostly targeted at the unbanked and rural population. He said: “This account is dominated by digital banks or fintech firms, and often lacks BVN linkage, which makes it an easy entry point for hackers.”
“Secondly, some banks, especially digital ones, may not meet regulatory requirements, creating a second loophole for fraudulent activity.
“Lastly, hackers can exploit any vulnerability to gain access to bank accounts.” Ijebor mentioned that the apex bank was also working on improving agency banking and enabling agents to register BVN, which will help move Tier-1 accounts to Tier-2.
