Why Did CBN Threaten To Close Several Accounts? Is Your Account Safe?

The Central Bank of Nigeria (CBN) has threatened to close several accounts in order to protect customers’ bank accounts and enhance security in the banking system. 

The move comes as the CBN aims to ensure compliance with the use of Bank Verification Number (BVN), a unique identification system for bank customers.

According to data from the Nigeria Inter-Bank Settlement System (NIBSS), the total number of issued BVNs has reached 57.96 million as of July 3, 2023. 

The NIBSS has observed an increase in compromises on conventional security systems such as passwords and PINs, leading to a demand for stronger security measures in the banking sector.

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The BVN system provides a unique identity that can be verified across all Nigerian banks, protecting customers’ bank accounts from unauthorized access and reducing the risk of fraud and identity theft. 

It enhances the chances of detecting blacklisted customers and serves as an acceptable means of identification across all Nigerian banks.

The CBN considers BVN as part of its overall strategy to ensure effective implementation of Know Your Customer (KYC) principles and promote a safe, reliable, and efficient payment system. 

By removing accounts not linked to BVNs from the financial system, the CBN aims to clean up the sector and curb the growing incidence of fraud.

Recent reports indicate that bank customers in Nigeria lost N472 million to fraud in the first quarter of 2023 alone, with a total of 12,553 fraud cases recorded during that period. 

In response to this, the CBN has placed over 6,000 BVNs on a watch list for fraudulent transactions. Out of the total number of active customer accounts, 130.57 million are linked to BVNs.

By threatening to close accounts without BVNs, the CBN intends to strengthen security measures and protect customers’ funds. 

The use of BVNs helps to establish a reliable and secure banking environment, reducing the risk of unauthorized access to accounts and improving the industry’s ability to detect and prevent fraudulent activities.