The Central Bank of Nigeria (CBN) recently announced the implementation of a new Know Your Customer (KYC) policy, which has sparked debate over whether this policy is in favor of or against financial inclusion. In addition to other policies, the CBN had mandated the use of bank verification numbers or national identification numbers (NINs) for tier 1 wallets in a circular sent to all commercial, merchant, non-interest, and payment service banks, other financial institutions, and mobile money operators on December 1st.
The CBN stated that as part of its effort in promoting stability, it became necessary to strengthen the know your customer( KYC) procedures in financial institutions under the purview of the Central Bank of Nigeria (CBN). Accordingly, the CBN hereby issues an amendment to section 1,5,3 of the regulatory framework for banks verification number operation and watchlist for the Nigerian banking industry. The guideline mandated all tier 1 account and wallet holders to have BVN or NIN.
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Reacting to the new policy, Executive Director at Ecosystem Sarafadeen Fasasi questioned the emergency of the new policy. He expressed concern about the capacities of NIBSS & NIMC to manage the traffic that this policy will generate. According to him, “the tier 1 and wallet based customers largely reside in the rural areas with no or inadequate financial institutions and will have to travel kilometers to regularize .It means Opay customers in Agwara across river Niger will have to travel to Agidingbi in ikeja Lagos state to regularize.” He concludes that financial inclusion is in danger and our regulator needs to stay in action and be organic in their approach.
Olu Akanmu the CEO, Board Advisor and Executive in Residence at Lagos Business School Said “ We have 90 percent NIN adult coverage already. (103 million). That is what the ecosystem has to get to our collective subconscious. Most people with tier 1 accounts , even running on smart phones who are adults, have NIN. All those accounts should be linked so that we know them clearly. The benefit to the ecosystem when all accounts have digital identity is huge- more trustworthy payment systems that can identify frauds and fraudsters, crimes like kidnapping , better and trusted use of digital payments , foundation data for credit etc. This is a progressive move for financial inclusion. It will also drive even more digital identity registration. With 103 million Nigerians with NIN today, there should no longer be an excuse for accounts not to have a tied digital identity”.