Business - Banking & Finance Updated: December 09, 2023

NIN, BVN: Yahoo boys, others face tough times over CBN's new directives

December 09, 2023

The recent directive by the Central Bank of Nigeria for a "Post no Debit" restriction on all bank accounts without a Bank Verification Number (BVN) and National Identification Number (NIN) effective April 2024, is beginning to give many Nigerians, especially those with shady transactions sleepless nights.

“Post No Debit” is a term used to describe a restriction imposed by banks on specific accounts, preventing customers from making withdrawals, transfers, or any other debits from their accounts.

This will effectively freeze the funds in the account, rendering it inaccessible for the duration of the restriction.

The CBN, in the directive contained in a circular issued last week Friday, also stated that all the BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.

The circular, jointly signed by the Director of the Payments System Management Department, Chibuzo Efobi, and the Director of the Financial Policy and Regulation Department, Haruna Mustapha, said the directive was part of efforts to promote financial system stability and strengthen the Know Your Customer (KYC) procedures in all financial institutions.


KYC in banking is a process by which banks obtain information about the identity and address of the customers. This process helps to ensure that banks' services are not misused. The KYC procedure is to be completed by the banks while opening accounts and also periodically update the same.

The apex bank, in the circular, also amended Section 1.5.3 of the Regulatory Framework for BVN to ensure mandatory registration of all tier-1, 2, and 3 bank accounts and wallets with BVN or NIN.

The circular read: “As part of its efforts in promoting financial system stability, it becomes necessary to strengthen the Know Your Customer procedures in financial institutions under the purview of the Central Bank of Nigeria.

“Accordingly, the CBN hereby issues an amendment to Section 1.5.3 of the Regulatory Framework for Bank Verification Number Operations and Watch List for the Nigerian banking industry.

“In this regard: it is mandatory for all Tier-1 bank accounts and wallets for individuals to have BVN and/or NIN. It remains mandatory for Tiers 2 & 3 accounts and wallets for individual accounts to have BVN and NIN.


“The process for account opening shall commence by electronically retrieving BVN or NIN related information from the NIBSS BVN or NIMC’s NIN databases and for same to become the primary information for onboarding of new customers.

“All existing customer accounts/wallets for individuals with validated BVN shall be profiled in the NIBSS ICAD immediately and within 24 hours of opening accounts/wallets.”

As a result of the new guidelines, the bank said any unfunded account/wallet shall be placed on “Post No Debit or credit until the new process is satisfied, adding that all accounts/wallets will be electronically revalidated by January 31, 2024.

The latest directive from the CBN is coming on the heels of concerns about the use of bank accounts, especially wallets in perpetrating fraudulent activities by Internet fraudsters, popularly called Yahoo boys. There had also been concerns about terrorism financing.

 Allnews.ng recalls that during the administration of former President Muhammadu Buhari, there were reports, and indeed, confirmation by the administration of some individuals in the country, especially Bureau de Change (BDC) operators channelling funds to terrorists causing havoc in the North-West and North-East geopolitical zones of the country.


Though there were promises by the Buhari administration, through its Attorney-General and Minister of Justice, Abubakar Malami for the prosecution of the alleged financiers of terrorism in the country, it never saw the light of the day.

With the new CBN directive, Nigeria may, for the first time, have taken serious steps towards curbing the two hydra-headed monsters of Internet fraud and terrorism financing.

According to banking executives who spoke to Allnews.ng, though many Nigerians see the new CBN directive as undue punishment for bank customers, it is nevertheless a needed step in the direction.

Olawale Bello, a senior banker with one of the new-generation banks in the country, opined that there is better in the BVN/NIN directive of the CBN than the inconvenience many are seeing.

"Fraudsters have hidden behind many lapses in the Nigerian banking sector for too long to perpetrate their evil acts for far too long, thereby giving the country the bad name it is known for at the moment.

"This is even more with wallet accounts that most Nigerians are now patronising as there are limited KYC required to open such wallets. This has been used by fraudsters to defraud innocent people, wiping accounts and transferring same to wallet accounts, which most are not traceable.

"With the new directive, this will be corrected as proper KYC will be required of every account or wallet holder, making it easy for both transactions and holders to be traced", Bello said.

Allnews.ng reports that the new directive may however hit more on digital financial solutions firms such as OPAY, Palmpay, Moniepoint and many others that have become the favourite of Nigerians due to their ease of opening, minimal requirements and complete digital presence without the need to visit any physical location.

These digital bank customers may, however, be left in the cold as many of them who are peasants, artisans and petty traders are without NIN or BVN.

This situation, stakeholders, insist will be unduly punishing Nigerians, urging the CBN to extend the deadline for enforcing the directive.

According to them, some customers may delay in complying, and wait till the deadline is close before besieging their banks to regularise their bank accounts.

The National President of the Association of Mobile Money and Bank Agents in Nigeria, Sarafadeen Fasasi, in his reaction to the implementation of the directive, as well as the time attached to it, said it would cause unnecessary hardship on bank customers.

He said: “We agree that all bank accounts must have the minimum KYC, however, our challenge is with the urgency with the implementation and that has always been our own challenge with the Central Bank of Nigeria.  We think the issue of KYC shouldn’t be an issue that should generate so much controversy and it should be gradual. It should not be an emergency." 

Speaking further, Fasasi urged the CBN “to meet with stakeholders and solve all the access issues so that we can spread this over a year for customers to regularise. You don’t need to freeze their accounts; you only need to instruct your service providers that they should link the NIN of their database.

“Retrieve their customers’ NIN from NIMC and retrieve their BVNs from NIBSS and marry the two. You don’t need to inflict punishment on the masses of the people.”

Also contributing to the debate on the CBN directive, a financial expert and former President of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu called on the apex bank to sanction banks that allowed customers to operate accounts without BVN and NIN.

According to Unegbu, the CBN should spare customers and impose heavy sanctions on the banks that allowed such.

"It is the fault of the DMBs. Instead of punishing customers, CBN should sanction the banks heavily.

"They were instructed to ensure customers have BVN and NIN but they failed to comply because of the greed to have deposits", he said.

Despite the new directive, with the possibility of curbing fraudulent activities of fraudsters and terrorism financing, there is the belief that they may resort to new methods of circumventing the system.

A forensic fraud investigator with a Nigerian bank based in Lagos who does not want his name in print believes that these fraudsters may just look for other ways of carrying out their nefarious activities.

According to him, these include using credit cards and making online purchases.

"Nothing is new when it comes to fraud and fraudsters; they only recycle and tweak their methods. These guys may just fall back to making online purchases in a bid to defraud their victims. That, of course, has always happened, only that it does not confer on them immediate financial advantage. But whatever they buy can also be converted to money. 

"Except the regulatory authorities can find ways around regulating online purchases, we may still have a long way to go", he said.

As it stands, it is left to be seen how effective the CBN can be in curbing fraudulent activities in the banking industry and how seamless its implementation will be.


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