The Unsavoury Side of BVN Policy Implementation

THE on-going exercise that requires Deposit Money Banks (DMB)- that is, banks that accepts deposit from the public- to compulsorily enrol the biometrics of their customers to create a unique Bank Verification Number (BVN) for each customer is one of the best things that has happened in the Nigerian financial system today. Apart from the issue of right to privacy under the constitution, it is a huge step towards dealing with fraud and identity theft in the Nigeria financial system. It will also be a viable tool in the fight against the scourge of money laundering, both in Nigeria and in the global economy by cutting funds to drug cartels and terrorist in Nigeria and around the world. With global banks like HSBC, Barclays, etc falling prey to criminal drug syndicates, the importance of a BVN cannot be over-emphasised.
Notwithstanding the noble idea behind the BVN, it is unfortunate that the Central Bank of Nigeria (CBN) has imposed a deadline of June 2015 for all customers to enrol into the BVN system. The CBN in its circular dated 18 September 2014 stated among others as follows:

*That by March 2015, transactions valued at N100,000,000.00 (One hundred Million Naira) and above should only be allowed for customers with the BVN; (These include but not limited to money transfers, loans, contingencies, among others);

*That by June 2015, all bank customers should have the BVN. Any bank customer without the BVN would be deemed to have inadequate KYC;
The implication of the above is that from July 1st 2015, customers without BVN will be deprived of access to their bank accounts. Ironically, the same CBN in its website stated as follows:

"As at 7th June, 2015, the collaborative efforts in the implementation of the BVN initiative had resulted in the achievement of over 12.43 million registered customers in the central database."
(see http://www.cenbank.org/Paymentsystem/BVN.asp)

However, in a recent survey carried out by Enhancing Financial Innovation and Access (EfINA), an independent financial sector development organisation and published in the Africa Development magazine of Sunday, 17 February 2013, there are about 28.6 million people with bank accounts in Nigeria. No doubt that the figure would have increased in 2015. But going by that survey alone, about 16.17 million customers, that is, 56.5 per cent of bank customers in Nigeria would be deprived of access to banking facilities after June 2015. See (http://afrikandevelopment.net/nigeria-central-bank-goes-after-the-unbanked-p380-148.htm). The action of the CBN would seem to me to be a gross violation of the fundamental rights of Nigeria under the Constitution of the Federal Republic of Nigeria. There is no doubt that money held in customers' bank accounts are personal properties to the customers.
Under section 44 of the Constitution of the Federal Republic of Nigeria 1999, the right to personal property is a fundamental right and no person or institution can infringe the right unless such right has been derogated by section 45 of the constitution. It is contended that such a drastic measure that will deprive customers of the money in their bank accounts may infringe the constitution. Furthermore, it appears CBN may have overlooked the effect of its June deadline decisions on customers living abroad. There are so many Nigerians living all over the world today. There are those who have settled abroad and others who are diplomatic staff in various Nigeria missions abroad. There are also staff of foreign companies in Nigeria who are on secondment abroad. Most of these Nigerians still carry out significant banking activities with banks in Nigeria and they regularly send money home and as a result they contribute substantially to the in-flow of foreign
exchange into Nigeria. Indeed, in a banking survey conducted by KPMG and published in 2014 at page 10, it stated that in-flow of personal remittances to Nigeria from non-Nigerians abroad in 2013 was USD21 billion. This makes Nigeria the fifth largest remittance receiver in the world and accounts for 65.6% of total flows into Sub-Saharan Africa.

Interestingly, the CBN alluded to the existence of these Nigerians, when it said in its websites that:

"The Bank is making effort to ensure that all the bank customers wherever located are appropriately captured. Currently, some of these customers are based in various countries across the globe and a framework will be put in place for capturing them."

But after the fine words above, what was the 'framework …. put in place for capturing them'? The answer is that CBN has not put any 'framework in place to capture these valuable customers. In the CBN's frequently asked question (FAQ) page on its website, it says as follows:
"Question 24: How would bank customers living outside Nigeria enrol:
Answer: Bank customers living outside Nigeria would have to come back to the country to enrol." This is to say the least pathetic, if that is the best 'framework' we can get from one of the most important government agencies in Nigeria. It is particularly shameful that CBN expects customers living abroad to pay for flight tickets to come to Nigeria just to enrol for BVN. This is insensitive and unfair. It is difficult to understand why the CBN that acknowledges the existence and importance of these group will not put a proper mechanism in place to ensure that their biometrics are captured and BVN issued to them accordingly. It is important to note that the action of CBN may deprive Nigeria of the much needed capital remittance from these customers abroad. This brings me to the important issue of Impact Assessment Analysis. As expected from any organised society, it will not be outplace to enquire whether an impact assessment was carried out prior
to the roll out of the BVN, to assess the effect the programme and its implementation will have on bank customers, both in Nigeria and abroad. Everybody, including the CBN, knows that there are Nigerians all over the world and they maintain banking relationship with various banks in Nigeria. An impact assessment would have revealed some of the challenges that will be encountered by an improperly thought out implementation of this beautiful programme. Of course in this madness, the DMBs are not totally blameless. They are members of the Bankers' Committee and Nigeria Interbank-Settlement System (NIBSS) that initiated the BVN project. If the CBN in its wisdom does not deem it necessary to put appropriate arrangements in place to capture the Biometrics of Nigerians abroad, the DMBs should have come up with one. After all, these Nigerians are customers of the DMBs and not that of the CBN.

Way Forward-

In the light of the above, the CBN should as a matter of urgency seriously considers the extension of the deadline and come up with a workable and cost effective arrangement for customers living abroad to enrol for the BVN. In considering this matter, the CBN may want to take on board some of the suggestions below:

Direct the DMB's to use their branch offices network in various cities around the world to enrol the biometrics of Nigerians living in those cities; For those Nigerians who do not live in cities where there are branches of Nigerian banks, the CBN should urgently liaise with Nigeria High Commissions in those countries to assist with the enrolment of biometrics for Nigerians in those countries and send them to CBN. After all, The Embassies are doing a similar thing for the Nigeria Immigration Service regarding application for Nigeria international passport; For those Nigerian banks that do not have branches abroad, they could liaise with their corresponding banks in those countries to assist with the enrolments of biometrics of Nigerians in these countries. I cannot foresee any difficulties with this suggestion. After all these Nigerian banks already have banking relationship with these foreign banks and it should not be too difficult to persuade them to
assist in this instance. The CBN must swing into action immediately and act like an apex bank it is.