The Central Bank of Nigeria (CBN) has imposed a “Post no Debit” restriction on all bank accounts that do not have a Bank Verification Number and a National Identification Number, beginning in April 2024.
The term “Post No Debit” refers to a limitation imposed by banks on specific accounts that prevents clients from making withdrawals, transfers, or other debits from their accounts.
This technique effectively freezes the account’s funds, making them inaccessible for the length of the restriction.
The CBN’s mandate was contained in a circular published by the top bank on Friday and distributed to all deposit money banks.
The Central Bank further announced that by January 31, 2024, all BVNs or NINs attached to and/or associated with all accounts/wallets must be electronically revalidated.
Chibuzo Efobi, Director of Payments System Management, and Haruna Mustapha, Director of Financial Policy and Regulation, both signed the circular.
The mandate, according to the bank, is part of efforts to maintain financial system stability and strengthen Know Your Customer procedures across all financial institutions.
It also changed Section 1.5.3 of the BVN Regulatory Framework to require the registration of all tier-1, 2, and 3 bank accounts and wallets with BVN or NIN.
The circular reads, “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 hRS of opening accounts/wallets.”
As a result of the new guidelines, any unfunded account/wallet will be placed on “Post No Debit or Credit” status until the new process is completed.
It further stated that by January 31, 2024, all accounts/wallets will be electronically revalidated.
The circular further stated that, “Effective immediately, no new Tier1 accounts and wallets should be opened without BVN or NIN,
“For all existing Tier1 accounts/wallets without BVN or NIN: i. Effective immediately, any unfunded account/wallet shall be placed on “Post No Debit or credit until the new process is satisfied.
“Effective April 1, 2024, all funded accounts or wallets shall be placed on “Post No Debit or Credit, and no further transactions permitted.
“The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.”
To ensure full and uniform compliance, CBN further asked all Executive Compliance Officers, Chief Compliance Officers, or Heads of Compliance Functions to familiarize themselves with the following guidance notes.
“To ensure uniform and full compliance, the Executive Compliance Officers, Chief Compliance Officers, or Heads of the Compliance Functions are advised to acquaint themselves with the attached Guidance Notes which becomes applicable to ALL institutions regulated by the CBN.
“Also, a comprehensive BVN and NIN audit shall be conducted shortly and where breaches are identified, appropriate sanctions shall be applied.
“Finally, all financial institutions regulated by CBN are required to apply strict compliance on restrictions on Tier1 accounts/wallets as they relate to limits on transaction values and cumulative balances,” the circular concluded.
