BVN and banking transactions
COMING at a time when Nigerians yearn for responsibility, economic revival and the general wellbeing of the country, the Central Bank of Nigeria (CBN’s) enforcement of the Bank Verification Number (BVN) policy could not have been more desirable.
It may have raised much dust, but certainly, the nation needs a dose of openness, accountability and discipline after years of pillaging of the treasury and recklessness in handling finances. A very sound management of the identities of bank customers is, therefore, a good beginning, hence the initiative is laudable.
More than five million customers’ accounts were initially blocked for failure to either register or link up registrations with their banks. As the sanctions took effect, affected customers were barred from withdrawing or transferring funds through automated teller machines (ATMs), internet banking platforms and over-the-counter deals in banking halls. That confusion and the inconveniences therefrom reverberated across the land but this was unnecessary, given the length of time allowed through extensions for the registration.
It is gratifying that the CBN has declared the exercise a success and there would be no going back on prescribed sanctions for non-compliance. Indeed, in any success rating of Nigerian government policies, the BVN exercise takes after the Federal Road Safety Commission (FRSC’s) implementation of the seat belt use by motorists; it recorded a very high, almost total, compliance rate.
Ordinarily, citizens ought not to be threatened with sanctions over simple processes, but attitudes die hard. Hence, the last-minute stampede and inconveniences before compliance. Banks have, indeed, invested too heavily in the project for anyone to countenance non-compliance or a sabotage of the exercise.
Meanwhile, the policy has to be sustained for its impact on the financial system to be fully felt. In sustaining and properly managing the policy, however, there would be issues that might need adjustment to remove such areas as might impede its continued smooth implementation.
This includes millions of accounts especially in rural areas, not yet captured in the exercise. The CBN and the Deposit Money Banks (DMBs) should not shy away from consolidating on their working arrangement to facilitate a smooth conclusion of the process till every customer is captured. The apex bank’s directive on uninterrupted enrolment of customers, well after the October 31 deadline, for instance, is a pointer to an accommodation of all interests.
The benefit of the exercise is believed to include but not limited to capturing many unexplained or suspicious deposits by the unique identification mode of BVN. Also, the scheme is aimed at capturing biometrics as opposed to the fictitious house addresses or fake identities of customers which were hitherto the order of the day, and encouraged fraud in banking activities.
The project should also create a sense of decorum and honesty in the credit system of the financial sector, as every activity or transaction will now have an identity behind it, putting a face to the customer. Perhaps, more fundamental is the explanation that it would assist the banks to sort out chronic fleet-footed and serial debtors that fleece banks for additional facilities despite unfulfilled commitments elsewhere, often bringing ill-health to the industry.
However, in spite of the acclaimed gains, the authorities should not be unmindful of the complaints of citizens over multiple biometric registration processes in the country, producing multiple databases all of which are either not synchronised or even not put to good use, at all. There should be a conscious effort to integrate all biometrics collected by agencies including FRSC (driver’s licence); INEC (for election purposes); National Identity Management Commission, NIMC (national identity card) and now, the banks among others, and put all to the good management of Nigeria’s affairs. In fact, the attempt by police authorities to introduce another biometric capturing exercise for its own use had to be stopped following public outcry, and appropriately so. All forms of disorderliness in uncoordinated biometric collection and storage should be resolved in favour of a single, useful database.
The complaints that the CBN has taken too central a role in the registration process is understandable, especially against the background of supposed bank and customer independent relationship. But Nigeria needs such a clearing process as the BVN given the plethora of problems assailing the financial sector. It must, however, be organised, made to work as intended, and follow the guidance and inspiration drawn from similar programmes elsewhere.
Technological advancement has also been a plus in the implementation of the BVN policy and the hope is that Nigeria’s banking sector would be the better for it.