CBN to freeze accounts/wallets without BVN, NIN by April 2024

The Central Bank of Nigeria (CBN) has issued a directive mandating a “Post no Debit” restriction on all bank accounts without a Bank Verification Number (BVN) and National Identification Number (NIN) effective April 2024. This restriction entails freezing the funds in such accounts, preventing withdrawals, transfers, or any debits.

The directive was communicated in a circular sent to all deposit money banks by the CBN. The apex bank emphasized that all BVN or NIN linked to accounts/wallets must be electronically revalidated by January 31, 2024.

The circular, jointly signed by Chibuzo Efobi, Director of Payments System Management Department, and Haruna Mustapha, Director of Financial Policy and Regulation Department, aims to bolster the Know Your Customer (KYC) procedures across financial institutions.

It also amends Section 1.5.3 of the Regulatory Framework for BVN, making it mandatory for all tier-1, 2, and 3 bank accounts and wallets to be registered with BVN or NIN.

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Key points highlighted in the circular include:

– Mandatory BVN or NIN for all Tier-1 accounts and wallets for individuals, and likewise for Tiers 2 and 3 accounts.
– Onboarding new customers involves electronically retrieving BVN or NIN information from the NIBSS or NIMC databases.
– Profiling of existing customer accounts with validated BVN in the NIBSS ICAD within 24 hours.
– Unfunded accounts without BVN or NIN to be placed on “Post No Debit or Credit.”
– Full compliance is required by January 31, 2024, and no new Tier-1 accounts or wallets should be opened without BVN or NIN.
– Sanctions will be applied for identified breaches after a comprehensive BVN and NIN audit.
– Financial institutions must ensure strict compliance on restrictions related to transaction values and cumulative balances for Tier-1 accounts/wallets.

The directive aims to enhance financial system stability, strengthen KYC procedures, and ensure a standardized approach to customer identification and verification across regulated financial institutions in Nigeria.