The Bankers’ Commit-tee has commenced Bank Verification Number (BVN) classification plan that will allow the rich and poor in rural areas to have access to financial services.
Central Bank of Nigeria (CBN) Governor, Godwin Emefiele who broke the news on Saturday at the end of the 11th Bankers’ Committee retreat in Ogere, Ogun State, said BVN will now be classified into two- BVN Premium and BVN Lite.
What this means
BVN Premium will cover bank customers that can provide the 18 basic requirements for a complete BVN enrolment while the BVN Lite will require minimal documentation like name and phone number for bank customers, especially those at the rural areas that do not meet the full requirements.
This will enable such grassroots customers, mainly the poor, conduct minimal financial services and reduce financial exclusion rate for Nigeria.
The CBN introduced BVN scheme into the banking sector in 2014 and has since enrolled over 40 million bank customers into the scheme and targets taking the number of BVN-linked accounts to 100 million in the next five years. The BVN scheme, which gives each bank customer unique identification, was meant to revolutionise the banking and payment systems while ensuring the safety of depositors’ funds.
The CBN Governor said the Bankers’ Committee is collaborating with the Nigerian Communication Commission (NCC) and Mobile Money Operators (MMOs) to ensure that the project succeeds and more Nigerians brought into the financial system. He said the BVN 2.0 classification scheme will help bring more people into the financial system and reduce the financial exclusion rate.
Emefiele said the Know Your Customer (KYC) scheme is part of what will be migrated into the BVN Lite. “However, there are people who are currently financially excluded, like people in our rural communities that carry phones but not having financial services. With the collaboration of NCC, we are putting this BVN arrangement to allow them to conduct minimal financial services.”
He added, “It should be possible for us to migrate this person into the BVN lite arrangement where they can conduct minimal financial services, not just banking services, but minimal financial services, insurance and anything you want to conduct in terms of finance, e-payment, or anything, you can do it with the aid of your phone. Bringing them into the financial system will help to increase the rate of financial inclusion and reduce the exclusion rate.”
How does this affect you
According to Emefiele, with the benefits of the BVN to bank customers and the economy, there is a need to consolidate and move BVN to 2.0. “This entails, for instance, to reclassify and segregate transactions that could be done on BVN. We have two classifications. The existing BVN that we have in the system has about 18 lines of information. We decided that we classify into BVN premium and BVN lite. There should also be a system where people who are financially excluded can now be included. If you are on BVN lite there is a limit to the kind of transactions you can do in terms of deposit and in items of loans,” he added.
“The important thing is that we want to make you financially included where you can conduct basic banking services. Our people in the rural communities who have BVN lite will later be migrated to the BVN premium when you meet all the requirements,” he stated.
Speaking on securing the banking system, Emefiele said cyber risk which today is growing in different parts of the world means that banks, the CBN, and the government, need to do something about it to protect the financial system.
The banks were also advised to invest more money in tools whether soft or hardware that will help them in containing cyber risks in their operational environment. “But of course on the part of the CBN, we have all along been issuing different guidelines and frameworks on how the banks can combat and how the industry and the country can combat the incidence of cyberattacks which in any case will continue but we just need to prepare that when they strike we are able to withstand the shock and we are able to discover it early enough for the banks not to lose money or for depositors funds not to be lost by a bank,” he said.