Why CBN adds 7,552 BVN on its watchlist, to close lots of Bank accounts in UBA and other Banks

The Central Bank of Nigeria (CBN) has recently announced that they have added 7,552 account holders to their Bank Verification Number (BVN) watchlist due to fraudulent activities. This marks a 25% increase from the previous number of 6,045 as of June 2022.

The Director of the Payment Systems Management Department of the apex bank, Musa Jimoh, made this announcement on Tuesday, May 2, 2023, in Calabar.

Jimoh, who was represented by Adefuye Adeyemi, the assistant director in the department, stated that individuals investigated for various fraud risks could be excluded from the financial system.

Additionally, the use of BVN is becoming increasingly important in developing credit profiles for depositors and improving access to credit, as reported by Punch.

During the same event, Godwin Emefiele, the CBN Governor, was represented by the Director of Monetary Policy, Dr. Hassan Mahmud. Emefiele disclosed that the total number of BVN enrollments had risen to 57.43 million as of March 31, 2023.

He emphasized the importance of BVN in the bank's Know Your Customer (KYC) requirements and how it has been instrumental in tracking, identifying, and investigating fraudulent financial transactions.

Despite the benefits of the BVN system, Emefiele pointed out the challenges in implementing digital payment systems due to weak social infrastructure, such as unstable telecommunication networks and power infrastructure.

He also expressed concern about the nefarious activities of unlicensed entities in the payment value chain, exploiting access to information technology to engage in regulated activities without the appropriate licenses and authorization.

Emefiele added that the activities of fraudsters continue to threaten the resilience of payment platforms and impact public confidence.

It is clear that there is a need for tighter regulations to prevent fraudulent activities in the banking sector, particularly given the increase in the number of individuals on the BVN watch list for fraudulent activities.