CBN orders banks to suspend fraud-linked accounts

CBN orders banks to suspend fraud-linked accounts

The Central Bank of Nigeria (CBN) has ordered the Deposit Money Banks (DMBs) in the country to suspend the bank accounts and Bank Verification Numbers of their customers linked with any fraudulent activities.

The order was contained in a framework released by the CBN to guide the banks in the operations of the BVN.

The framework came barely one year after the CBN mandated all bank customers in the country to obtain their BVN.

As a result of the framework, a number of the DMBs have written to their customers, informing them of the development and their readiness to suspend any account linked to any fraudulent activity.

For instance, Skye Bank Plc has written to its customers, informing them that the CBN framework on the operations of the BVN had given it the right to suspend all accounts linked to fraudulent activities.

The bank’s letter to its customers on the development, a copy of which was obtained by correspondent, read, “This is to inform you that the CBN recently released a framework to guide the operations of the BVN and a watch List for the Nigerian financial system.

“Banks have been mandated to place restrictions on accounts and the BVN associated with fraudulent activities and report same to appropriate agencies. In compliance with this directive, we have updated the terms and conditions of your account with us to include the following: If a fraudulent activity is associated with the operation of your account, you agree that we have the right to apply restrictions to your account and report same to appropriate law enforcement agencies.”

The emergence of the BVN appears to have given the regulator and commercial banks the authority to identify and deal with any infraction by any bank customer.

The CBN Governor, Mr. Godwin Emefiele, recently threatened to use the BVN to blacklist serial loan defaulters in the banking sector.

Specifically, Emefiele hinted that the CBN under the auspices of the Bankers’ Committee had concluded plans to use the BVN of customers to blacklist loan defaulters and prevent them from accessing further loans in the nation’s banking system.

He said the plan to blacklist loan defaulters followed the Bankers’ Committee’s decision to increase financial access to Nigerians especially operators in the agricultural value chain and the Micro, Small and Medium-scale Enterprises, as part of efforts to grow the economy and create more jobs.

He had said, “We do expect them (customers who take loans) to meet their own side of the bargain because we have a credit registry; their names will go into the black book if they don’t pay. If their names go into the black book if they don’t pay, it means they have ruined their credit; because we also agreed at this meeting (the Bankers’ Committee) that we are going to raise the standard of credit bureau and credit reporting in this country.

“We are going to raise the standard to a point where there will be credit scoring for people who take bank loans. And when you are scored low or you are scored at zero, we are going to use the BVN to block you from having access to any finance in the Nigerian banking or financial services industry.”

According to the CBN governor, the need to increase finance access to the agriculture and the MSMEs segments to grow the economy is imperative, stating that the SMEs constitute 95 per cent of the businesses in the country.