The Central Bank of Nigeria (CBN) is set to remove bank accounts not linked to the Bank Verification Number (BVN) system from the financial system in an effort to reduce fraud.
Blaise Ijebor, the Director of the Risk Management Department and Chief Risk Officer at CBN, announced this at the Prembly Compliance Breakfast Dialogue on Thursday.
Ijebor explained that cybercriminals exploit three loopholes in the system, including the use of Tier-1 accounts, which can be opened with minimal documentation and are not linked to BVN.
These accounts have low deposit limits and are popular among unbanked populations, making them easy targets for fraudsters.
As of April 2, 2023, a check on the NIBSS website indicates that there are only 57.01 million registered BVN numbers out of the total 191.4 million bank accounts in the country, with 133.5 million active.
Ijebor also highlighted the need for digital banks to comply with regulatory requirements and the importance of customers taking necessary cyber security measures.
He added that the CBN was working with the Nigerian Inter-Bank Settlement System to address the issue and plans to move Tier-1 accounts to Tier-2 with the help of agents who can assist with BVN registration.
However, Ijebor did not give a timeline for the clean-up.
