BVN ensures stable financial system-CBN

. Banks lost over N2.19b to electronic frauds, link 30 million BVNs

The Central Bank of Nigeria (CBN) has again assured Nigerians that the Biometric Verification Number (BVN) is geared towards financial system stability as it ensures that customers of Deposit Money Banks (DMBs) are identified and known, thereby preventing illegal activities in the banking sector.

However, there are indications that fraudsters are targeting over N3 trillion in accounts yet to be linked to the BVN.

Even though, the apex bank said that it has taken necessary steps to prevent the Nigerian banking sector from being used to launder money and other illegal activities.

The CBN Governor, Mr. Godwin Emefiele, who gave the assurance at the opening of the regional course on “Combating Money Laundering and other Financial Crimes’’, noted that one of the core functions of the apex bank is to promote a stable financial system in Nigeria and combat money laundering to ensure the financial system is safe and solid.

The course, organised by the West African Institution for Financial and Economic Management (WAIFEM), drew participants from central banks, the ministry of finance and law enforcement agencies of Nigeria, Gambia, Ghana and Liberia.

Emefiele, represented by the CBN’s Director, Financial Policy and Regulation Department, Mr. Kelvin Amugo, said that the apex bank was working closely with operators in the banking sector to ensure that ill-gotten-gains of crime were not legitimised through the financial sector.

“Because of that, we have embarked on a number of initiatives.We have issued circulars to Security Compliance Officers at banks; we have also issued circulars on the importance of KYC (Know Your Customer) before any account is opened,’’ he said.

Emefiele said that the apex bank had supported the establishment of the Economic and Financial Crimes Commission (EFCC) and the Financial Intelligence Unit, which were strategic to fighting the menace.

He said that Nigeria had also applied for membership of the Financial Action Task Force on Money (FATF).

According to him, FATF is an intergovernmental organisation, founded in 1989 by the G7, to develop policies to combat money laundering.

He said that the task force had already scheduled a visit to Nigeria later in the year as part of its procedure, prior to admitting the country.

Meanwhile, Tech and financial analysts, who spoke at a CEO roundtable facilitated by Ericsson and International Data Corporation, recently, opined that privileged information available to them showed that certain hackers, with collaborators from within the country and across the world, were developing a Ransomware to attack banks’ data systems to steal up to N3 trillion in accounts yet to be linked to the BVN.

Consequently, over N2.19 billion were lost by banks to fraudsters through electronic channels in 2016 fiscal period and the new development may raise losses astronomically by year-end if the threat is not contained.

The analysts specifically stated that some of the abandoned funds were proceeds of corruption and needed to be cleared from the banking system. They, however, warned that should the CBN remove the N3 trillion from the banks, it would create a serious liquidity challenge in the banking system.

According to senior assistant to the minister of communications on digital transformation, Akim Yusuf, “the corruption that has led to the trapped N3 trillion is being perpetrated by Nigerians who have no self-control,” adding that antidotes needed to be developed via institutional mechanism.

“We need to put in place mechanisms to monitor the flow of funds in the public sector. This is why we have introduced policies like the Treasury Single Account and the Biometric Verification Numbers.

“We need to increase the level of digital tracking of funds to curb corruption. We plan to move all government services online. This will minimize the use of cash, which encourages bribery”, he noted.

The spokesman also said that there was also the need to consolidate and harmonise the multiple biometric data systems in the country to make it difficult to hide illicit funds.

However, the BVN so far issued by commercial banks in the country is moving close to 30 million marks, as the total number enrolled for the exercise had risen to 29.4 million as at June 18, 2017.

But from the total number of 97.57 million banks accounts in the country, including corporate and individual savings, currents and other forms of accounts, only 51.7 million bank accounts savings and currents as well as other forms of accounts have been linked with the BVNs.