CBN’s regulatory framework implementation: Banks place disclaimer on customers

Central Bank of Nigeria

Money Deposit Banks in the country have commenced the implementation of the Central Bank of Nigeria (CBN’s) regulatory framework for Bank Verification Number (BVN) and watch-list for the Nigerian financial system with some of them placing a disclaimer on their customers as they adjust their account opening conditions.

The CBN had penultimate week released the regulatory framework to stem the rising incidence of frauds in banks.

The apex bank, in a memo signed by its Director of Banking and Payments System, Mr. Dipo Fatokun, had stated that, “The framework, without prejudice to existing laws, is a guide for the operations of the watch-list in the financial system. It provides standards for the BVN operations and watch-list for the Nigerian banking industry.”

The watch-list is a database of bank customers identified by their BVN who had been involved in proven fraudulent activities in the Nigerian banking industry.

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CBN had given a list of penalties for those found culpable, including the bank reserving the right of choosing “not to continue business relationship with an account holder on the watch-list.”

In addition, the bank is required to report the affected accounts and BVNs to the appropriate agencies.

Consequently, banks have devised their means of implementing the framework.

UBA, in a message to its customers informing them of its commencement of the implementation of the framework, stated that “In compliance with the CBN directive, the ‘terms and conditions’ clause in our account opening packages have been updated with the following disclaimer: ‘If a fraudulent activity is associated with the operation of your account, you agree that we have the right to apply restrictions to your account and BVN and report to appropriate law enforcement agencies’”.

Commenting on this a lawyer, Mr Chuks Amajo, said the statement by the bank was in order.

According to him, “It is a way of freeing itself from every form of culpability, especially since the CBN has also threatened to punish banks found aiding customers’ fraudulent activities.”

He opined that the ideal thing would have been for banks to invite all their customers to sign a new agreement term incorporating the new condition, “But that is going to be tough because of the bank’s customer base, hence the option taken by the bank.”