Nigeria’s central bank has announced tighter rules governing the country’s Bank Verification Number system, limiting access and tightening enrolment requirements as authorities seek to curb rising fraudulent transactions in the banking sector.
In a statement issued late Friday, the Central Bank of Nigeria (CBN) said the measures would take effect from May 1 and form part of an addendum to its regulatory framework governing the use of the Bank Verification Number (BVN) across the financial industry.
The directive, signed by Musa Jimoh, director of the bank’s Payment System Policy Department, introduces stricter rules on enrolment, data access and transaction monitoring in a bid to strengthen the integrity of the country’s banking system.
The BVN system a biometric identification platform used by banks to verify customers was introduced in 2014 to reduce identity theft and improve transparency in financial transactions.
Under the revised framework, the central bank reiterated that only individuals aged 18 years and above will be eligible to enrol for a BVN.
The regulator also imposed tighter restrictions on updates to customer information linked to the system, stating that phone numbers associated with a BVN can now be changed only once.
Analysts say the move is aimed at tackling fraud schemes in which criminals repeatedly alter contact details linked to bank accounts in order to evade detection.
“The amendment is part of ongoing efforts to safeguard Nigeria’s financial system and strengthen customer identification processes,” the statement said.
The central bank also directed financial institutions to establish a temporary watchlist for BVNs suspected to be involved in fraudulent transactions.
According to the new rules, a BVN flagged by a bank may remain on the temporary watchlist for up to 24 hours while the institution contacts the account holder for clarification regarding the suspicious activity.
If the transaction is confirmed as legitimate, the BVN will be removed from the list. Otherwise, further regulatory or investigative actions could follow.
Industry experts say the measure is designed to allow banks to act quickly against suspected fraud while giving customers the opportunity to explain transactions before harsher sanctions are applied.
Nigeria’s financial sector has expanded rapidly in recent years, driven by growing digital banking services and mobile payments. However, the rise in electronic transactions has also been accompanied by an increase in cybercrime and identity-related fraud.
The central bank said access to the BVN database would remain strictly controlled as part of efforts to protect sensitive customer data.
Under the updated guidelines, access to the database will be limited to financial institutions licensed by the CBN. The regulator also retains the authority to grant access under exceptional circumstances, provided such requests comply with existing laws and regulatory provisions.
The bank said the changes were introduced to strengthen oversight of how biometric and financial data are used within the banking industry.
The BVN system links customers’ biometric information — including fingerprints and facial data — to their bank accounts, allowing regulators and banks to track suspicious activities across multiple institutions.
Authorities believe the system has helped reduce identity fraud since its introduction, although challenges remain as digital financial services continue to grow.
The new BVN rules form part of a broader regulatory push by the central bank to tighten oversight of Nigeria’s financial sector.
Earlier this week, the CBN issued new guidelines on automated anti-money laundering systems aimed at improving how financial institutions detect suspicious transactions and combat illicit financial flows.
The regulations, titled “Baseline Standards for Automated Anti-Money Laundering Solutions for Financial Institutions in Nigeria,” require banks and other financial service providers to deploy advanced monitoring tools to identify potential money laundering and terrorism financing.
Officials say the reforms are designed to bring Nigeria’s financial system closer in line with global regulatory standards and strengthen confidence among investors and customers.
With digital banking continuing to expand across Africa’s largest economy, regulators say enhanced safeguards will be critical to maintaining trust in the financial system while protecting customers from increasingly sophisticated fraud schemes.
