Thousands of commercial bank customers who operate accounts without a Biometric Verification Number (BVN) are currently panic stricken, as the Federal High Court, Abuja, has granted federal government’s prayers to have such accounts forfeited if owners do not come forward to claim them in two weeks time.
According to Daily Sun, trouble for non-BVN account owners started on October 17 this year, when Justice Nnamdi Dimgba ruled on an ex-parte motion filed by the Attorney General of the Federation (AGF), Justice Abubakar Malami, where he slammed a restraint order on commercial banks to desist from operating such ‘ghost’ accounts.
Justice Dimgba further directed the banks to disclose the owners and the financial content of each of the accounts.
The 19 Deposit Money Banks (DMBs) in the country are affected by the court orders which seek to check corruption and enthrone transparency in the financial system.
The ex-parte motion – FHC/ABJ/CS/911/2017- was filed on September 28, 2017 and argued by the plaintiffs’ lawyer, A. D. Tyoden.
It was brought pursuant to the Central Bank of Nigeria’s (CBN) Know Your Customers (KYC) Guidelines and Section 3 of the Money Laundering (Prohibition) Act of 2011 as amended.
The enrolled orders from the ruling read: “That the 1st – 19th defendant banks shall disclose: (a) the names of the accounts as operated; (b) account number(s); (c) outstanding balances (d) domiciliary accounts and (e) the branch/location where the accounts are domiciled of all accounts without BVN.
“That the 1st – 19th defendant banks to disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial Papers and any other relevant information related to the transaction made on the accounts.
“That an order is hereby made freezing the said accounts by stopping all outward payments, operations or transactions (including any bill of exchange) in respect of the accounts pending the hearing and determination of the substantive application.
“That an order is hereby made directing the 1st to 19th defendant banks to disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and any other relevant information related to the transaction made on the accounts.
“That an interim order is hereby made directing the Central Bank of Nigeria and the Nigeria Interbank Settlement Systems to validate the information contained in the affidavit of compliance/disclosure filed by the respective 19 banks within seven days from the date of service on the Central Bank and NIBSS.
“That an interim order is hereby made appointing a Bank Examiner from the Central Bank of Nigeria to examine the books of any bank that fails to comply with the order of the honourable court to file affidavit of disclosure.
“That an interim order is hereby made granting leave to the applicants or any officer authorised by them to advertise the accounts without BVN disclosed by the bank in a widely circulated national newspaper as notice to any person or body corporate or financial institution who may have any interest in any of the said accounts to claim ownership of same within 14 days of the publication of the order and show cause why the proceeds in the account should not be permanently forfeited to the Federal Government of Nigeria.”
Justice Dimgba fixed further hearing on the case for November 16, 2017.
As at the first quarter of this year, the CBN had issued 30,511,506 BVNs.
However, the Nigeria Inter-Bank Settlement System (NIBSS) says a total of 15.72 million bank accounts remain unlinked as at February 2017.
Prior to the court order, the apex bank issued a memo warning the banks, NIBSS, Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) to ensure proper capturing of the BVN data and validate same before linkage with customers’ accounts; ensure all operated accounts are linked with the signatories’ BVN; and ensure customer’s names on the BVN database are the same in all of his/her accounts, across the banking industry.
The CBN Director of Banking and Payment System, Mr. Dipo Fatokun, who signed the memo asked the banks to report confirmed fraudulent individuals’ BVNs to NIBSS for update of the watch-list database; report the BVN of deceased customers to NIBSS for update on the BVN database; render returns to NIBSS for enlisting individuals involved in confirmed fraudulent activities, with the report signed by the chief audit executives.
The apex bank requires NIBSS to ensure BVN data are stored within the shores of Nigeria and shall not be routed across borders without the consent of the CBN, while users of the BVN information shall establish adequate security procedures to ensure the safety and security of its information and those of its clients, which shall include physical, logical, network and enterprise security.
The BVN, which gives each bank customer a unique set of number, was launched on February 14 2014 for the purpose of registering all customers in the financial system using biometric technology.
It seeks to promote transparency in the nation’s financial system.