- CBN must tread softly not to trample on the innocent
The Federal Government may have finally opened a vital flank in the anti-corruption fight. The ruling it procured last week from the Federal High Court in Abuja directing all commercial banks in the country to freeze all bank accounts that are devoid of the Bank Verification Number (BVN) may well turn out most far-reaching, considering that a bewildering 46 million such untagged accounts are said to exist.
That such a number of bank accounts are still without the biometric data compliant BVN tag after about three years of its introduction is in itself suspicious and requiring of interrogation.
The BVN scheme actually became necessary when the Nigerian banks seemingly failed in their primary duty of customer identification. The ‘know-your-customer’ (KYC) rule is at the heart of modern banking which managers of financial houses in Nigeria have grossly neglected and indeed, abused. Every customer’s database is expected to be complete, sacrosanct and accessible; leaving no room for any iota of doubt and confusion. But it is a grave indictment on banks that they cannot maintain credible record of their customer base.
This led to the introduction of the BVN unified database by the Central Bank of Nigeria. Yet three years down the line, such a large number are still to be fully captured and integrated into a unified financial database.
On this score, the move by government last week may well be said to be in order and salutary. Some of the orders by the court request that banks, apart from freezing all accounts without BVN, must publish names and details of all such customers.
Further, that CBN and commercial banks must disclose all accounts in their custody and the balances in such accounts. That the chief compliance officers of banks must disclose details of such accounts, including their owners and proceeds with affidavits of compliance. All outward payments, operations or transactions must be stopped and full disclosures of investments made with funds from these accounts without BVN in any products, must be made.
This interim order has been made pending the determination of the substantive application seeking the forfeiture of the balances in the accounts to the Federal Government.
There is no doubt that this move by the Federal Government has jolted the deposit money banks which are suspected to be deliberately sabotaging the government’s efforts at fighting graft by colluding with corrupt individuals and government officials. An untracked bank account is a veritable conduit for money laundering and all sorts of financial malfeasance.
And many of the commercial banks have been guilty of all these. Recall the recent manipulation of the foreign exchange process and the subversion of the Treasury Single Account scheme. There really cannot be a proper check on the activities of the major financial houses if all customers’ accounts are not accessible to the CBN and all the necessary regulatory authorities.
However, while the Federal Government is lauded for being on the right track in boosting its anti-graft war, many have called for caution and a need to make haste slowly. It has been noted that many account holders in the rural areas and the Diaspora may not have been able to complete the task of registering for the BVN. It has been particularly difficult for most Nigerians living abroad to get on the BVN platform because of restricted access to registration points.
It is therefore suggested that more time is required while more windows are opened for ease of BVN registration, especially for Nigerians in the Diaspora. Rushing to freeze accounts and confiscate bank balances has also been deemed to be a violation of basic rights of citizens as well as a trampling of the constitution. Having a BVN was never a precondition for opening and operating a bank account in the first place, it has been argued.
In summary, government, even in the pursuit of criminals, noble as this may seem, must err on the side of the innocent.
