‘Biometric Verification Number Project to Check Forex Fraud’

MD, NIBSS, Adebisi Shonubi

With just two months to the expiration of the deadline on the on-going biometric Verification number initiative of the Central Bank of Nigeria and the Bankers Committee, operators say the exercise will boost the war against foreign exchange fraud, among other vices, reports Festus Akanbi

One major issues confronting the nation’s banking sector is foreign exchange fraud.

The severity of the problem is further underscored by a chain of regulatory measures undertaken by the Central Bank of Nigeria (CBN) in the foreign exchange market in recent time.

However, as the war against foreign exchange fraudsters’ rages, Nigerian banks are coming to terms with the adoption of the on-going biometric Verification Number initiative as a veritable tool to cut down on foreign exchange frauds.
The BVN, which is an initiative of the CBN and the Bankers’ Committee, was launched on February 14, 2014. It is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity. This will allow banks access to more reliable information that could inform decisions on customer loan and credit applications and other complex transactions.

The initiative is expected to boost financial inclusion as those who have typically stayed away from mainstream banking due to low literacy levels will be able to open and access their bank accounts using their biometric information rather than traditional identification methods.

In order to check the activities of fraudsters who commit various atrocities through the usage of the naira denominated cards of the various Nigerian banks, the CBN recently slammed a spending limit on card users.

Curbing Arbitrage in Forex Market
However, banking sector operators are of the opinion that the Bank Verification Number (BVN) initiative, when fully implemented, will help to curb arbitrage in the foreign exchange market, and check abuse of the naira debit cards for transactions abroad. This was the view of the Executive Director, Sterling Bank Plc, Mr. Abubakar Suleiman.

Suleiman, who said this at a recent interactive session with the media in Lagos, said with the BVN, each bank customer will have a unique identification, which will make it easy to prevent people from flouting the Central Bank of Nigeria’s (CBN) recent policy on the use of naira denominated debit cards for transactions abroad.

The policy reduced the spending limit on the usage of the naira denominated debit cards for transactions abroad, from $150,000 per person annually to $50,000 per person annually. The daily cash withdrawal limit on the card was also fixed at $300 per person.

Managing Director, Union Bank of Nigeria Plc, Mr. Emeka Emuwa, who first revealed that the Bankers’ Committee had agreed to reduce the limit on the usage of naira debit cards abroad, explained that the decision was taken because of some cases of card abuse abroad impacting exchange rate stability.

“We did find that in a number of cases people were using the cards in a manner that they were not expected to use them and there have been cases of arbitrage. So, in order to sustain stability, what was agreed by the committee was that the limit for the use of the naira debit cards would be reduced,” Emuwa said.
Commenting on whether fraudsters could find ways round the policy, the Sterling Bank official said this will not be feasible when the BVN initiative is fully implemented, as each bank customer will have a BVN that will give him/her a unique identity that will be known to every player in the financial sector.

Thus, when such a customer has reached the limit of his naira debit card spending abroad, he will not be able to use another card as the system will immediately recognise him.

The BVN Initiative
The Central Bank of Nigeria in collaboration with the Bankers Committee in April reduced the amount each naira-denominated debit card holder could spend abroad from $150,000 to $50,000 per annum. It also pegged customers’ daily withdrawals overseas at $300.

In April, the Managing Director of the Nigeria Interbank Settlement System, Ade Shonubi, also said the on-going biometric registration of bank customers across the country will boost retail credit in the banking industry.

As part of efforts to encourage enrolment for the BVN, the CBN had directed banks to only honour transactions over N100million from customers with BVN from March 2015.

Such transactions, according to the central bank, include but not limited to, money transfers, loans, and contingencies, among others.

The CBN also urged all bank customers to register for their BVN by June 2015, warning that any bank customer without a BVN would be deemed to have inadequate Know-Your-Customers by that date.

Ade Shonubi, managing director, Nigeria Interbank Settlement System plc (NIBSS), said recently that bank customers who had done the mandatory biometric registration at any bank branch will soon start collecting their BVN cards as the cards were already with the banks awaiting collection by customers. Shonubi said bank customers would not be charged for the cards.

“We are giving the BVN cards out for free. The cost is borne by the Bankers’ Committee, which considers the whole biometric project very important. They have been bearing the cost; the cost of the cards, cost of almost everything else that has to do with the BVN.

“I have got my BVN card. I would encourage bank customers to talk to their banks as well. They have been printing them and sending them to the banks to distribute to the branches where you have enrolled, you would be sent an SMS. For those that have given email address, it would be sent to their emails,” Shonubi said

Last Minute Rush for Registration
Meanwhile, random checks by our correspondents on banks in Lagos and some other parts of the country have shown that bank customers have intensified efforts to meet the June deadline for the biometric number verification project.
It would be recalled that the BVN enrolment was commissioned by the Bankers Committee as part of its financial inclusion strategies.

Accordingly, the BVN gives each bank customer unique identity across the Nigerian banking industry that can be used for easy identification and verification at point of banking operation.

The exercise includes getting bank customers biometrics, with the use of fingerprints, and facial image, after which each customer will be given a bank verification number.’

The BVN enrolment which is a continuation of the $50 million biometric project involving the CBN, the Bankers’ Committee, NIBSS, Dermalog and Charms Plc, was meant to assign a unique number to every bank customer for enhanced security of transactions.

The scheme, according to the promoters was further aimed at helping to prevent identity theft and fraud in the industry. It is also expected to enhance credit advancement to customers.

However, the BVN issued at the point of enrolment will be linked to all customers’ bank account in Nigeria.

The exercise became imperative following the continuous cases of security issues arising from passwords and Personal Identification Number (PIN) of customers.

Although there was initial low turnout of customers with respect to registration in the on-going BVN exercise as a result of poor awareness and lack of interest, bank customers appeared to have risen to the occasion by trooping into various branches of banks to register their data to avoid being shut out of bank transaction after the June deadline.

THISDAY checks in money deposit banks located along Idiape-Iwo road in Ibadan, and Mokola –Dugbe axis in Ibadan Oyo State last week showed a significant increase in the turnout of bank customers for the biometric verification number exercise.

A staff of Ecobank in Ibadan who spoke with our correspondent described the exercise as a huge success, attributing the last minute rush of bank customers for the exercise to the increased sensitisation on the exercise.

The same tempo was noticed in some of the banks visited in Lagos last week. At Guaranty Trust Bank Iju, Lagos, customers were sighted either taking their turn to register for the exercise of collecting their numbers when THISDAY visited.

At the Zenith Bank, Allen Avenue, Ikeja Lagos, the situation is the same as customers were seen in the banking hall completing their application form to enable them do their transaction.

Further monitoring of banking activities also showed that the last minute rush is more work for bank official as it was not really under compulsion to enrol when the exercise kicked off last year.

But now, bank officials are strongly advising customers to enrol in the exercise in their best interest.

Normally, customers get their ticket identification number after enrolment as their BVN will be sent to them via text message after some days.

“Pressure is more now as customers are strongly advised to do it otherwise they cannot engage in any transaction in bank. By end of June this year, every bank customer should have registered”, an Operation Manager working in one the commercial banks in Lagos said.

Culled from Thisday