BEVERLY HILLS, October 20, (THEWILL) – The Central Bank of Nigeria, CBN, on Thursday directed deposit money banks and other financial institutions in the country to monitor accounts of customers where fraudulent activities are suspected. The watch-list will be a database of bank customers’ identified by their Bank Verification Numbers, BVNs, who have been involved in confirmed fraudulent activities in the Nigerian banking industry.
The directive is contained in the Regulatory Framework for Bank Verification Number, BVN, Operation and Watch-list for Nigerian Financial System released by the CBN, the implementation of which is with immediate effect and shall guide activities of the participants in the provision of the BVN operations in Nigeria and that the CBN, Nigeria Inter-Bank Settlement System, NIBSS, Deposit Money Banks, DMBs, Other Financial Institutions, OFIs, and Bank Customers are participants in its implementation.
CBN’s Director Banking & Payments System, Dipo Fatokun, who signed the framework, said bank customers are to abide by the regulatory framework for BVN operations and the watch-list for the Nigerian Banking Industry and also report all suspicious or unauthorised activities on their accounts.
The BVN gives a unique identity across the banking industry to each customer of Nigerian banks.
Data from the CBN showed that Nigeria experienced a total of 3,500 cyber-attacks with 70 per cent success rate and loss of $450 million within the last one year mainly through cross channel fraud, data theft, email spooling, phishing, shoulder surfing and underground websites.
Although e-fraud rate in terms of value dropped by 63 per cent, after the BVN introduction and improved collaboration among banks via the fraud desks, the total fraud volume rose significantly by 683 per cent.
The new regulation is expected to greatly assist the CBN in curbing the menace of fraudsters. The circular has it that five stakeholders will be part of the process, namely the CBN, Nigeria Inter-Bank Settlement System, NIBSS, deposit money banks, other financial institutions and bank customers.
It reads in part, “A watch-listed individual shall not be allowed to enter into new relationship with any bank; a bank may choose not to continue business relationship with account holder on the watch-list.
“Where a bank chooses to continue an existing business relationship with holders of account on the watch-list, the account holder shall be prohibited from all e-channels, such as ATM, POS, Internet Banking, Mobile Banking, including issuance of third-party cheques.
“A watch-listed customer shall not provide reference to another customer, neither shall he/she be allowed access to credit facility or guarantee credit facilities.
“A watch-listed individual shall remain in the watch-list for a period as specified in the penalty table. In the event of a reoccurrence, the tenure shall begin to count from year one. Penalties that applied to watch-listed customers shall apply to all accounts that he or she is a signatory to.”
Fatokun explained that the new 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.
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