Implications of the new CBN’s BVN and NIM policy

On the 1st of December 2023, the Central Bank of Nigeria (CBN) introduced a new policy on bank verification numbers (BVN) and national identity management (NIM). The policy ensures that all bank accounts and wallets with a minimum of tier-1 have a BVN or NIM or both. 

The guideline reference number is PSM/DIR/PUB/CIR/001/053. It refers to all commercial banks, merchant banks, non-interest and payment service banks; other financial institutions, and mobile money operators. In the circular, it was stated that all accounts and wallets at the aforementioned institutions must regularize their Tier-1 customer accounts with BVN or NIM and not necessarily both. They are expected to do so immediately.

What's a Tier-1 account?

According to many online sources, a Tier-1 bank account or wallet is one with a transaction limit of 300,000 a day or less. In this case, most of the online banks and Fintech do not require their customer to input their BVN when opening an account or wallet. Therefore, the minimum KYC (know your customer) that's done on Tier-1 accounts and wallets are the names of the individuals opening the account, their emails, and phone numbers. The new CBN’s BVN and NIM policy will change all that.

Implications of the CBN BVN/NIM policy on financial institutions

All financial institutions included in the guideline must begin instructing new customers to include their BVN or NIM for the first time. Also, Tier-1 accounts with these institutions will force these customers to include a BVN or NIM before they can continue using the accounts. This may take effect immediately by those banks or very early in January. Failure to do so will attract sanction by the CBN. More so, the inclusion of BVN in Tier-1 accounts will help NIBSS regularize its data in the industrial customers account database (ICAD). 

Impact on banks’ customers

Banks’ customers as well as other institutions mentioned in the circular, are expected to get their BVN or NIM ready. Failure to do so may result in the closure of their accounts. Also, it can be used to fetch out impersonation in the banking sector and its sub-sectors. Individuals using other names in accounts and wallets will not be able to retrieve their money. More so, such data with ICAD can be utilized by lenders to get repayment of debts from defaulting (non-performing) debtors.