Bank customers panic as BVN deadline expires today

As the deadline date for the new interim court order obtained by the Federal Government to freeze all accounts – corporate and individual – without Bank Verification Numbers (BVN) expires today, several operators of bank accounts without the required BVN are in serious trepidation over possible seizure of their accounts by the Central Bank of Nigeria (CBN), following the Federal High Court which ordered compliance between two weeks.

Consequently, no fewer than 15 million Nigerians living in the Diaspora are set to lose over N3trillion if the court grant permanent forfeiture order.

Apart from Nigerians in the Diaspora, other categories of customers would who would be affected include those who invested in Treasury bills; fixed deposits, among others.

Following the court order, sharp reactions have continued to trail the directives by the Federal High Court in Abuja, ordering the Central Bank of Nigeria (CBN) and the Deposit Money Banks (DMBs) in the country to disclose all accounts in their custody and the balances therein.

The Daily Times recalls that the same court also ordered the commercial banks to disclose the details of all such accounts, their owners, among other issues, while also making an interim order directing the banks to freeze all the said accounts by stopping all outward payments, operations, or transactions, pending the determination of the substantive application seeking the permanent forfeiture of the balances in the accounts to the Federal Government.

The BVN project was initiated by the CBN to uniquely verify the identity of each Bank’s customer for ‘Know your customer’ (KYC) purposes, protect bank customers from fraud and to strengthen the banking system.

In the recent time, BVN has become a veritable tool for fighting fraud in the foreign exchange (forex) market. It has also been deployed by the CBN to achieve transparency in forex deals and sustain exchange rate stability. But in desperation of not losing deposits in 46 million bank accounts that have not been linked to BVN, Deposit Money Banks (DMBs) operating in the country have started reaching out to their customers, asking them to come and complete the biometric registration process.

However, disturbed by this, banks have started sending text messages and electronic mails to customers without BVN although, majority of customers affected by the development were mostly those with names mismatch, findings by one of our correspondents revealed.

For instance, investigations showed that some banks’ SMS to their customers without BVN read: “Dear Customers, Your Acct is *********.Kindly visit any of our branches to enroll for BVN or link your existing BVN via ATMs, website or the through the bank USSD code.” Speaking in an exclusive telephone chat with one of our correspondents in Lagos on Thursday, President, Bank Customers’ Association of Nigeria (BCAN), Dr. Uju Ogubunka, said: “This shouldn’t have happened in the first place, but since it has happened, all parties involved should comply, and longer time for compliance should be given to bank customers.”

The BCAN boss, who was a former Registrar, Chartered Institute of Bankers of Nigeria (CIBN), noted that the time given was too short and all parties should ensure they do this without harming each other by protecting the interest of everybody. Commenting on the impact of the new policy on the Nigerians in Diaspora, he said: “They should be taken into consideration by given enough time for the exercise, because there are some of them who are processing letter for administration for their deceased ones.

In this country, it takes months before such things can be finalised, such people should also, be recognised while coming up with a new deadline. “Also, there are some people who are sick. In fact, intensive awareness programme should be mounted telling people that this is what the Federal Government wants to do; that any account that is not linked with the BVN, the government will appropriate it.

“So, when people know that this is the intention of the government, they are likely to react to the issue faster than expected.

But if they don’t know the essence of what you are doing, then you are just talking to yourself. “That is the way we have looked at it and we believe this is a listening government, because not all the bank account holders work in government or are politicians. So, they should bear those things in mind”.

With the interim order of injunction handed down barely two weeks ago by Justice Nnamdi Dimgba, banks are to stop outward payments or any transactions in respect of the accounts without BVN until the substantive application filed by the Federal Government through the Attorney -General of the Federation (AGF) and Minister of Justice, Mr Abubakar Malami (SAN) is determined by the court.

The ex-parte motion dated September 28, 2017, had the Federal Republic of Nigeria and the AGF as plaintiffs/applicants, with Access Bank Plc, CitiBank Nigeria Ltd, Diamond Bank Plc, Ecobank of Nigeria Ltd, Fidelity Bank Plc, First Bank Plc, Guaranty Trust Bank Plc, Heritage Bank Plc, First City Monumental Bank Plc, Keystone Bank Nigeria, Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Nigeria, Sterling Bank Plc, Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc and the CBN as defendants/ respondents. The motion ex-parte was argued on behalf of the Federal Government by a lawyer, A. D Tyoden, asking the court to grant all the prayers as granted by Justice Dimgba.

But a Chief Executive Officer of a commercial bank said he and his colleagues will be unable to obey the directive of the Federal Government to forfeit customers’ funds in accounts without the Bank Verification Numbers.

But contrary to this statement, DMBs have been reaching out to their depositors reminding them of the need to enroll for the BVN exercise. Meanwhile, a source from another commercial bank, who was not authorised to speak for the bank said: “Prior to this directive, we have been freezing the bank accounts of customers to enable them to comply.

The customers who are yet to do that are mostly those who have names mismatch problems. This will be resolved soon.” Another tier 1 bank noted that its bank would comply with the CBN directive to freeze accounts and publish names if there was no contrary order within the stipulated period. “We are already taking steps to communicate with customers who had yet to do so”, the source explained.

Another CEO, who spoke on the condition of anonymity, said there are huge holes in the legitimacy of the order given by federal authorities. “What of a situation where somebody had died and the matter is in administration; what do you want the bank to do, to give government the money and face litigation? “What of Nigerians who are abroad and are still struggling to get their BVNs? What if we send the monies to government and we are sued by the customer(s)? “And the 14-day time frame is very short. Why the rush? Why not give a time frame, maybe till 2018 for people to get their BVNs?, he querried. But in his reaction, Chairman of the Coalition Against Corrupt Leaders (CACOL), Debo Adeniran, said banks were culpable in the illicit funds being kept with them as they use these funds to trade.

He said: “Some people have actually abandoned huge amount of money in some of these banks but the banks don’t want to cooperate because they enjoy free money to trade. So, they are also enjoying illicit money to remain in business so that they can trade with it. “If you remit up to N1 million, you will be reported to the Nigerian Financial Intelligence Unit (NFIU). Somebody can decide to remit N950, 000 into several accounts that will add up to N1 billion.

“But, once there is BVN, all these funds will be connected and the money remitted into such banks will have been added up if it is more than what can be defended. “If someone does genuine business abroad and wants to repatriate it, he will do that through the normal channel. “The dishonesty pervades the atmosphere which is why many people don’t like the Buhari administration.

“Some certain people could be understandable unless the CBN makes provision for them to do their data capture wherever they are. They can do it and pass to the home bank. Most of these banks have branches abroad. They actually advertise the branches of these banks in all the countries of the world.

“Some people deliberately avoided it because they know that the funds are not acceptable to the Nigerian extant laws and they know that the businesses they are doing cannot bring such humongous amount of money. BVN is a magic wand that stops all these excesses,” he added. Speaking also, a legal expert, Mr Rafiu Bello, said there ought to be a balance between law enforcement and rights of individuals.

According to him, although the government has supervisory power to ensure that the provision of the Money Laundering Act, the Central Bank of Nigeria Act and the Bank and Other Financial Institutions Act are complied with, the court of law as a balancing institution comes into play as to balancing the powers of the state and the rights of law abiding citizens.

He said: “But to every general rule, there must always be exception. There are cases of people abroad who have not been able to come and do their BVN. “For instance, I have an employee who does not have a means of identification yet and is trying to get a National Identity Card to enable him regularise his account but he cannot withdraw from it pending when he will get his BVN but the irony is that he can’t get the BVN without the National I.D card.

“If an order is made for such a person to forfeit his funds that will be infringing on his right to property because such person is genuinely not a money launderer and a criminal. “To regulate financial crime and the individual rights to enjoy their property which include the funds in their account,” he added.

On the part of the Association of Bureaux De Change Operators of Nigeria (ABCON), the group recently announced its collaboration with the Nigeria Interbank Settlement System (NIBSS), just as it organised a sensitisation programmes for Bureaux De Change (BDCs) on the use and deployment of Bank Verification Number (BVN) Validation Portal.

The BDCs, explained that the impact of the BVN portal can be linked with the swift recovery of the naira from over N520/$1 in February to N361/$1 at the parallel market, a development that has continued to marvel financial pundits. But those that understood the role played by Bureaux De Change (BDCs) in achieving this milestone were not surprised.

Commenting on this development, ABCON President, Alhaji Aminu Gwadabe, said the world is going digital, and BDCs under his leadership must stay ahead of the competition by deploying time-tested technology to deliver effective services to their numerous customers. In view of this, he noted, that the CBN had directed BDCs to validate the authenticity of BVN that clients wanting to buy forex submit to them.

The CBN had directed licenced BDCs to ensure that all their transactions have the BVN of the buying customers. The information must be included in the forex returns to the regulator. In the case of corporate customers, the BVN of a director of an authorised signatory of the entity must be provided to the BDC.

The ABCON boss said the sensitisation programme was part of its confidencebuilding agenda to ensure that BDCs abide by forex rules. “The programme held in the six geopolitical zones – namely Kano, Lagos, Awka and Abuja, among others is our input to CBN’s policy implementation.

It is an opportunity to take confidence-building in BDCs’ operations to greater heights. ABCON leadership has zero tolerance for its members that breach operational guidelines,” he said. However, as customers continue to panic over today’s deadline, the Abuja Division of the Federal High Court will today hear the suit instituted by the Incorporated Trustees of Total Support for Rule of Law and Justice Initiative, seeking to be joined as defendant in the BVN suit by the Federal Government.

The Incorporated Trustees of Total Support for Rule of Law and Justice Initiative had in a motion filed on its behalf by Chukwudi Igwe Esq, urged the court to join them as one of the defendants.

A 28-paragraph affidavit dated October 27, deposed to by one Agnes Peter, attached to the application, said it is aware that the Federal Government and AGF plan to obtain from the court, an order of permanent forfeiture of all deposits in all accounts with the 19 commercial banks without BVN. The applicant said that making it a defendant will enable it defend the interest of some Nigerians who may have not obtained their BVN based on some prevailing reasons beyond their control.

The group stated that if the permanent forfeiture order is allowed, it would affect accounts that were opened by persons who are deceased and would not appear in court to show cause why the proceeds in the account would not be permanently forfeited to the federal government. Other persons that may be affected by the order according to the group are those who may not have the finances to appear before the court for purpose of showing cause why the proceeds in the account would not be permanently forfeited to the Federal Government.

It was also revealed that the government was planning to apply for order of permanent forfeiture as it intends to block the accounts beyond period allowed by an ex-parte order. The federal government in the suit marked FHC/ ABJ/CS/911/2017, beside the commercial banks had joined the CBN as the 20th defendant.

Meanwhile, the Senior Special Assistant to the President on Foreign Affairs and Diaspora, Mrs. Abike Dabiri-Erewa, has appealed to the CBN and AGF to put modalities and logistics in place for Nigerians in the Diaspora to obtain their BVN to avoid forfeiture of their savings in their respective bank accounts. Dabiri – Erewa, who spoke through her Special Assistant on Media, AbdurRahman Balogun, urged the CBN to make it possible for all Nigerians in the Diaspora to have their BVNs done in their countries of abode as there had been challenges in getting it before now.

Dabiri-Erewa said, “Nigerians in the Diaspora had been remitting billions of US dollars back to the country on yearly basis, the highest on the continent of Africa, thus contributing to the socio-economic development of the country