CBN to hold banks accountable for BVN-related fraud

BVN

The Central Bank of Nigeria (CBN) has said it will hold commercial banks responsible for any fraud arising from failure to enlist individual customers into the Bank Verification Number (BVN) scheme.

The CBN, which stated this yesterday in its released framework for BVN operations and watch-list for the financial system, said it is part of efforts to develop and enhance the security of electronic payment system in the country.

In the report addressed to all banks and non-bank financial institutions, as well as payment system service providers, switches and mobile money operators, the apex bank reiterated that the framework is with immediate effect.

By the policy, banks and other BVN participants are to ensure that risks mitigation techniques are put in place to minimise operational, technical and fraud risks.

Besides, banks have been mandated to report frauds in the system, ranging from forgery, compromise, complicity, fraudulent duplicate enrolment and fraudulent infraction even without monetary value.

Others include confirmed successful fraud with monetary value, when a customer is watch-listed more than once and fraudulent individual that is at large.

Meanwhile, customers will now assent to disclaimer for banks that if fraudulent activity is associated with the operation of the account, the bank has the right to apply restrictions to the account and report appropriately to law enforcement agencies.

Also, in the case of complaints by customers against the banks’ services, the arising disputes shall be resolved by the affected banks or escalated to the CBN when they linger.

Customers will now be allowed to change names twice a year, subject to the provision of supporting documents, while change of birth date is once for all time, as well as minor correction due to errors, with supporting documents too.

Once a customer is placed on watch, the person can only be delisted by obtaining a formal document designed for such from the bank and passing through the processes required.

The development would require banks to invest heavily in their information technology platforms, as this would involve security of hardware, software encryption of messages transmitted through the BVN network.

The CBN said the objective of the framework is to clearly define the roles and responsibilities of stakeholders, operations of BVN; usage and management, deter fraud incidences in the banking industry, among others.

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