By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Central bank of Nigeria (CBN) on Thursday affirmed the use of Bank Verification Number (BVN) for foreign exchange (FOREX) transactions.
The CBN says it has however come to its notice that some customers are reluctant in disclosing their BVN to authorised dealers and buyers because of claims that there are attendant risks to the disclosure, according to a statement by Ibrahim Mu’azu, director, Corporate Communication.
Mu’azu says the Central Bank is affirming the adoption of the BVN as a condition for the purchase of FOREX which is expected to reduce the incidence of multiple purchases, round tripping and illicit transfer of funds.
Also, it will facilitate enforcement of authorised limits of forex sales to end users, sanitise the retail segment of the market and engender policies that will facilitate better allocation of the forex, based on genuine demands.
Other clarifications the apex bank said is that the BVN is neither a payment instrument nor an account number and therefore could not be used to access any account by unauthorised users. “The banks, BDC operators and even regulators use the BVN to validate the identity of a customer using some biometric information such as finger prints and photograph obtained at the point of enrolment,” the CBN added.
It further affirmed that the BVN provides the unique identity of each customer for the purpose of achieving effective “Know Your Customer” (KYC) principle and fraud prevention.
“For the avoidance of doubt, the provision of BVN by customers at the point of Forex purchase or for any legitimate banking transaction with any of the above named institutions does not attract any security risk. Rather it protects the customer against identify theft.
Customers can easily get their BVN from the mobile phone number submitted during the enrolment by dialing *565*0#,” the CBN said.
On October 21, the Central Bank directed the use of BVN for all FOREX transactions with effect from November 01, 2015.
The CBN gave this directive in a circular with reference number FPR/DIR/CIR/GEN/05/015 dated October 21, 2015 and signed by Kevin Amugo, director, Financial Policy and Regulation Department of the CBN.
The apex bank says it’s in continuation of efforts to stabilise the foreign exchange market, stem the rampant cases of foreign exchange leakages and illicit money and transfers out of the country, the use of the BVN for all forex dealings.
