Justice Nnamdi Dimgba of the Federal High Court in Abuja Mid October 2017 ordered the federal government to forfeit all accounts that are not linked to Bank Verification Numbers (BVN).
Some 19 commercial banks across Nigeria are required to file an affidavit of disclosure of all relevant accounts.
To improve Know Your Customer practices, the Central Bank of Nigeria (CBN) in February 2014 launched the BVN project. BVN is a unique identification number associated with a user’s biometrics that can be used for bank transactions across Nigeria. CBN required all bank accounts to be attached to BVNs. This project aims to reduce fraud in the banking system through proper tracking.
As of October 2017, 46 million out of 97.57 million accounts were yet to be linked to a BVN. Following the court ruling, banks were given 14 days to publish accounts without BVN in the newspaper so that owners can present why the funds in the account should not be forfeited by the Federal Government. Since the expiry of the ultimatum, there remains uncertainty on the actions that will be taken moving forward.
This order has been controversial for many reasons. It has been argued that the lack of compliance even after three years suggests that these accounts are fraudulent. However, there are over 15 million Nigerians living abroad who may not have been able to return to Nigeria to get a BVN or do not have access to points abroad where they can register for
a BVN. Hence, not all accounts without a BVN are fraudulent and forfeiture is said to discourage financial inclusion.
The Nigerian banks are scheduled to appear in court on November 18 to ask for an extension as they say that loans may need to be recalled because the forfeiture would deprive them of liquidity for lending. An appeal is also being considered.