BVN: Nigerians Rush to Banks as CBN Gives Order to Freeze Accounts

• By July, 62.7 million bank account holders signed up to receive Bank Verification Numbers (BVNs)
• This large increase is mostly the result of a decision made by the Central Bank of Nigeria (CBN) in December 2023
• Still, the number of active bank accounts and the number of BVNs that are registered still differs significantly

As of July, the number of bank account owners enrolling for Bank Verification Numbers (BVN) increased to 62.7 million, as reported by the Nigeria Inter-Bank Settlement System (NIBSS).

Compared to the 61.87 million registered in early May, this is a notable gain of 854,267 new registrations in just two months.

The number of records in the BVN database increased by 2.7 million this year from 60 million in December 2023.

The Central Bank of Nigeria (CBN) decision from December 2023 is the main cause of this noteworthy increase.

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By April 2024, all banks were required by the directive to freeze accounts that aren't associated with a BVN.

Furthermore, it mandated that the National Identity Number (NIN), also known as the BVN, be used for all accounts and wallets at all commercial, merchant, non-interest, payment service, and other financial institutions as well as mobile money providers.

There's still a big difference between the number of BVNs that are registered and the number of active bank accounts, even with the notable improvement that BVN enrollments have made.

As of March 2024, there were 219.6 million active bank accounts in Nigeria, according to recent banking data from NIBSS.

This suggests that there is a significant discrepancy between the total number of bank accounts and BVNs. Industry analysts, however, speculate that this disparity would not be as great given that a single BVN can be associated with several accounts.

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The World Bank states that as transaction accounts enable users to keep, transmit, and receive money, opening one is the first step toward greater financial inclusion.

“The number of Nigerians with accounts at regulated institutions such as a bank, credit unions, microfinance institutions, post offices, or mobile money service providers increased by 45 percent in 2021,” the global bank said.

Given the BVN's growing significance in financial transactions and account management, it is clear that the CBN's directive has sparked a rush for BVN registration.

The bank customer unique identity, or BVN, offers a centralized database for bank account verification and identification, improving security and lowering fraud.

In addition, the data from the Enhancing Financial Innovation and Access (EFInA) Access to Financial Services in Nigeria 2023 Survey indicated that 3 million people, or 5% of banking adults, lacked a BVN or NIN.

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Legit.ng reported that Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has expressed worry about the susceptibility of inactive bank accounts to fraudulent activity.

Addressing journalists on Tuesday after the two-day Monetary Policy Committee (MPC) meeting, Cardoso stated that the benchmark interest rate had increased by 50 basis points to 26.75%.

He clarified that accounts that are left idle for long periods of time are frequently easy targets for identity theft and unauthorised access by scammers.

Source: Legit.ng