Why the BVN hysteria needs to stop

The Bank Verification Number (BVN), a centralized biometric identification system for the banking industry, is a brainchild of the Central Bank of Nigeria (CBN) in collaboration with all banks in Nigeria. When it was launched in February 2014, millions of banked Nigerians rushed to their banks to get registered out of fear of losing access to their bank accounts. The deadline for the verification was initially set at June 30, 2015 but was extended to October 31, 2015 when millions of Nigerians remained unregistered. However, with less than five weeks to go, reports put the total number of unverified account holders at 32 million.

The BVN was the CBN’s response to fraud and a way of providing greater security in the banking industry. Findings also show that after the initial rush between the end of June and July 2015, there has been a steady decline in new BVN enrolment figure for August and September. Officials said many bank accountholders continue to show apathy instead of taking advantage of the extension in period. For a process that intends to provide security in the banking industry, reduce queues and improve efficiency, Nigerians appear reluctant to jump on the bandwagon. The question that has spawned several articles and reports now is why Nigerians are refusing to get verified.

The obvious answers include how inconveniencing the entire process is, the terrible state of infrastructure in the industry, the potentially stressful process of verification, a distrust of technology – especially when it involves money belonging to a good number of people. Lastly, the general lackadaisical attitude of Nigerians towards things like this.

Effects of non-registration and why they are unenforceable

Since the announcement was made in 2014, the CBN has threatened every bank user who failed to get verified by the deadline with a potential lack of access to their bank accounts until they complete the process. While the CBN’s reasons for demanding a nationwide biometric exercise might seem legit, reports continue to prove that biometrics is not the fraud-proof Messiah that CBN makes it out to be. In view of the fact that the CBN needs to look for alternative means of curtailing fraud, coupled with the ineffectiveness of the BVN process so far – as some customers have had to go back to be re-verified more than once, the question remains whether the BVN is as important as the apex bank portrays it.

The extension of the deadline has seen a lot of more banked adults getting verified, yet messages bombard the populace on a daily basis giving statistics intending to scare the unverified into action. However, what hasn’t been tackled in detail is this – what is the worst that could happen if an individual doesn’t get verified?

CBN promises that by October 31, all unverified account holders will lose access to their bank accounts. On the surface, this appears like a valid threat which has spurred about 20 million residents to action. However, on closer examination, it seems ludicrous that the CBN will deny bank account holders total access to their earned money because they did not get verified. In a country with high levels of illiteracy, where banks have to offer incentives to encourage residents to open accounts with them, it will be interesting to see how this all plays out.

The relationship between the general populace and banks is mutually beneficial. It appears that if people refuse to get verified, the worst that could indeed happen is that they will be temporarily be denied access to their accounts, thereby forcing them to get verified when they eventually file in to make complaints. This simply means users will continue to get verified, even after the deadline; and the banks will be unable to do anything to control the situation.

The way the current BVN situation works is similar to the way the Federal Government attempted to force the entire populace into registering for their National Identity Numbers (NIN) by imposing a deadline. Millions of citizens simply refused to get registered and as such, they didn’t have a NIN. In fact the government has had to bring down the eligibility criteria to encourage registration.

The major reason why an absolute directive like this will not work in a modern country is that new people open new bank accounts daily. It would be absurd for banks to deny the opening of new accounts, say on November 1, for simply not possessing a BVN. Nigerians in diaspora who have bank accounts will eventually come back home, but many will not do so until Christmas and New Year for various reasons. Will this category of people also be denied access to their Nigerian accounts just because they were not around to do it before the deadline?

The CBN might be fighting a losing battle with an obstinate public who has less to lose if things go sour. They could make the entire process easier on the populace by increasing channels for the verification and also making some parts of it doable online. Also, as Nigerians obviously respond well to incentives or threats with actual consequences like the imposition of a fee if you don’t register before the deadline (albeit impracticable); the CBN could recommend that banks hand out “encouragements” or incentives to law abiding citizens.

Nigerian citizens will surely revolt if they have to go through the entire verification process more than twice. The fact is the entire BVN process may end up as nothing more than a farce if Nigerian banks still have a problem with maintaining a secure and updated database.

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