Tarry awhile on BVN-less accounts
Justice Nnamdi Dimgba of the Federal High Court, Abuja recently directed that monies in 46 million bank accounts domiciled in nineteen banks which do not have Bank Verification Number [BVN] should be taken over by the Federal Government. BVN is a biometric identification system introduced by the Central Bank of Nigeria to link a customer’s […]
Justice Nnamdi Dimgba of the Federal High Court, Abuja recently directed that monies in 46 million bank accounts domiciled in nineteen banks which do not have Bank Verification Number [BVN] should be taken over by the Federal Government. BVN is a biometric identification system introduced by the Central Bank of Nigeria to link a customer’s bank accounts in all banks in order curb illegal banking transactions. It is a modern security measure in line with the Central Bank of Nigeria Act 1958. The High Court order of forfeiture was sequel to an originating motion of notice filed by Attorney-General of the Federation Abubakar Malami, SAN on behalf of the Federal Government of Nigeria.
Though a court has given government the go-ahead to take over the funds, there are arguments as to whether lack of BVN is a legal basis for such drastic action. Some lawyers say there is nothing in Section 3 of the Money Laundering (Prohibition) Act 2011 that makes BVN a condition precedent for operating a bank account in Nigeria. What the law requires is verifiable identity of the customer such as name, address, photographs, identity cards etc. BVN, being a policy instituted by CBN, is not an appropriate basis for a court of law to pass such an important judgment. There is the need to amend the Money Laundering Act to make the forfeiture legal.
There is a presupposition that so many bank accounts have not been linked to BVNs because those who own them cannot explain the balances in those accounts. It is however unreasonable to assume that 46 million Nigerians belong to this class of fraudsters. The number is almost a quarter of the Nigerian population. A 2010 report by the National Bureau of Statistics showed that 100 million Nigerians, or 60.9 percent of the total population, live below the poverty line. Most of those who own these accounts may therefore be poverty-stricken Nigerians who may have found the process of the BVN registration too cumbersome to engage in and not customer-friendly. Therefore, to seize these funds at this time is to defraud these ordinary Nigerians.
Some of the accounts that are not linked to BVN may belong to deceased persons whose family members may be engaged in legal battles over their estates, or to Nigerians in the Diaspora who have not been able to do their biometric registration because they have not home for many years. It is therefore vital for the Federal Government to take the pains to investigate each of these accounts to determine those associated with crimes and those owned by Nigerians who, as a result of legal or social circumstances, have not been able to do BVN registration. At least, each of the 19 banks involved has records of the owners of the accounts. The onus rests on anti-corruption agencies to harvest such data from the banks and engage in forensic scrutiny of each one to determine whether or not the balances in them should be forfeited to government.
It is also vital to stipulate the period within which such accounts should be dormant before the funds in them are forfeited to government. In countries like the United Kingdom, government takes over such funds if the accounts are dormant for over 15 years. However, when the owner of the account resurfaces after the funds have been forfeited and provide evidence that the money belongs to them, such amounts are released to their owners. If the country is using international best practices as the reason for asking for such forfeiture, the conditions for doing so must be made very clear and be in line with such best practices. Also, those whose accounts are not linked to BVN should be given another deadline to obtain one. Care should be taken not to punish innocent persons who had good reasons not to do the BVN registration.