The Central Bank of Nigeria has established new banking laws that account holders in Nigerian banks must comply with by tomorrow. New limitations on changing a Bank Verification Number (BVN) phone number will go into force on Friday. Account holders will only be permitted to modify the phone number associated with their BVN once under the new regulation outlined in a CBN circular. The policy is part of changes aimed at improving the BVN system's security and reducing the growing number of fraud cases in the banking industry. The top bank further said that only authorized financial institutions would be able to access the BVN database going forward.
Additionally, banks and other financial institutions were instructed to place BVNs suspected of involvement in fraudulent transactions on temporary watchlists.
The circular states that any BVN put on the watchlist may be there for a maximum of 24 hours while the financial institution gets in touch with the concerned consumer to explain the questionable transaction. The arrangement, according to the CBN, is meant to enable banks to take prompt action against potential fraud while simultaneously enabling impacted clients to verify legal transactions prior to taking additional action.
The implementation of a minimum age limit for BVN enrollment is another significant modification to the system. According to the regulator, only those who are 18 years of age or older will be able to register for a BVN; however, in accordance with current laws and regulations, exceptions may still be made in certain circumstances.
In order to strengthen identity verification procedures and reduce chances for fraudsters, who frequently use SIM swaps and multiple number changes to obtain unauthorized access to bank accounts, repeated phone number changes related to BVNs are prohibited.
As part of broader initiatives to enhance client safety and fortify electronic banking security, the CBN also published a second circular outlining new operational guidelines for instant payment services. Banks are required by the new legislation to give clients the option to voluntarily stop instant transfer services on their accounts at any time.
This implies that account holders have the option to temporarily disable electronic instant transfers for a predetermined amount of time. Customers can still physically visit bank locations to perform transactions during that time, but electronic transfers are prohibited.
According to the apex bank, in order to guarantee that only the account owner can perform such acts, requests to activate or deactivate instant payment services must go through multi-factor authentication. Additionally, the regulator ordered banks to let consumers lower their personal transaction limitations on their accounts.
Customers can select lower limits for extra security, even if the current maximum regulatory limits of N25 million for individual accounts and N250 million for corporate accounts remain unchanged.
The circular states that before being approved, each request to modify transaction limits must go through additional verification and risk assessment. In order to promptly spot suspicious activity, the CBN also directed banking institutions to implement sophisticated fraud monitoring systems that can trace transactions in real time.
Additionally, banks were instructed to improve identification verification processes for opening and reactivating online accounts. According to the new regulations, user information must be instantly verified against the national identification and BVN databases, and all accounts formed online must go through what the regulator called a "liveliness check."
Tighter regulations for mobile banking apps were also implemented by the circular. The mobile banking app will only be permitted to run on one device at a time going forward. Before being allowed access, customers utilizing a new device will need to go through new authentication and reactivation processes. Additionally, there will be short-term transaction limitations for recently activated mobile banking apps.
Whether the account is being formed or an existing account is being activated on a different device, transactions on such applications cannot exceed N20,000 for the first 24 hours following activation.
Additionally, additional authentication checks will be necessary for customers who are using internet banking on a new device for the first time.
According to the CBN, the new minimum operational requirements for rapid payment services will take effect on July 1.
