Barring any hitches, the league of Nigerian commercial banks are set to appeal the recent court ruling ordering the forfeiture of all accounts domiciled in the 19 banks that are not linked to BVN.
The Next Edition gathered that after elaborate consultations with the privy of the Central Bank of Nigeria (CBN), the banks have consulted a reputable law firm to appeal the court order.
Primarily, the banks are said to have mandated the law firm to file for an extension of time within which to effect the appeal before the next hearing on the substantive suit for the permanent forfeiture of all BVN non-compliance accounts in Nigerian deposit banks.
Although the BVN policy was introduced in 2014 by the previous government basically to ensure the protection of depositors accounts, the current twist on the policy manifested itself on October 17, when Justice Nnamdi Dimgba-led Federal High Court in Abuja ruled on the prayer by the Federal Government that all accounts in banks not linked to BVN should be forfeited to the federal government.
The court had also ordered the banks to disclose all accounts in their custody and the balances in such accounts, their owners and their proceeds in their affidavit of compliance deposed to by their Chief Compliance Officers.
The court also directed the CBN and the Nigeria Interbank Settlement Systems to validate the information contained in the affidavit of compliance/disclosure filed by the respective 19 banks within seven days from the date of service of the orders on them.
It had further ordered the banks to advertise the accounts without BVN in a widely circulated national newspaper as notice to those who might have any interest in any of the accounts.
Through the order which affects all domiciliary accounts including fixed term deposit accounts, the banks are expected to publish names of accounts owners without BVN, account numbers, outstanding balances, transactions and investments with such accounts especially fixed deposits as well as branch and locations where such accounts are domiciled.
Expectedly, the court order which was initiated by the federal government through the Attorney General of the Federation Abubakar Malami on September 16 is generating reactions from legal practitioners and major stakeholders.
BVN is issued by the CBN after biometrics (finger print and photograph) details of a bank customer have been captured.
Associated to this is the Know Your Customer, KYC, requirements which is a means of identification and proof of address required before customers can operate or open a bank account.
A foremost human rights lawyer Ebun Adegboruwa has faulted the court order to forfeit non–BVN linked accounts, describing it as illegal and unconstitutional.
He argued that it was wrong to give such an order which will affect customers that are not party to the suit.
He further argued that there was nothing in section 3 of the Money Laundering (Prohibition) Act 2011 that makes BVN a condition precedent for operating a bank account in Nigeria.
He said that what the law requires is verifiable identity of the customer such as names, photograph, address and valid identity cards that are basic requirements for opening of accounts.
He wants the Attorney General to review the case as it would amount to injustice as the federal government quest for revenue should not be carried out to the detriment of the fundamental rights of Nigerians.
Ifedayo Adedipe, another legal practitioner, has equally lampooned the court order on BVN stressing that even though the objective is to track down suspicious account outright forfeiture of people’s account on the basis of not linked to BVN was not right.
Some Nigerians argue that the federal government was ill-advised on taking the action which they argue might further kill the economy.
They wonder why government will continually churn unfriendly banking and economy policies that are inimical to the economic growth of the nation.
Their thinking is that the action is a misplaced priority given other challenging economic issues which the Buhari’s government has not been able to tackle.
Deji Adeyanju, a political activist said the federal government did not look at the implications of such directives on the health of commercial banks in the country and by the extension the Nigerian economy before seeking the interim order of forfeiture from the courts.
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He also explained that most of the bank accounts slated for forfeiture were owned and operated by Nigerians in Diaspora who may not have been disposed to returning home for the purpose of acquiring BVN for their accounts
“These accounts may not even harbour proceeds of fraudulent practices but could simply belong to Nigerians who went overseas to study or traveled abroad hoping to return but got stuck at the moment by no making of theirs”.
However, prior to the latest order of forfeiture of accounts without BVN, the banks have in the past one year stop customers without BVN doing transactions on their accounts unless they register. This The Next Edition gathered had been an ongoing development within the banks and its customers.
Findings also revealed that most of those that are going to be affected by the new forfeiture order are customers in the rural areas that were not adequately sensitised on the BVN policy as well as those in Diaspora. In the heat of government directive to Nigerians to get their accounts linked to BVN, concerns were raised over the years on the fate of accounts holders in Diaspora, but CBN had promised provisions would be made for them through the creation of registration locations for them abroad, but feelers from affected customers show that most of them have been caught in the new order. A Nigerian in London who operates an account in Nigeria confided in The Next Edition that there were no adequate registrations for them to do the BVN contrary to CBN promise. He said it was wrong for government for whatever reason forfeit somebody’s account for whatever reason. Most of those falling into these categories of customers in diaspora are those that travelled for studies or went for a particular period with intent to return.
Although checks revealed that most of the accounts that are still non-BVN compliant are those that have discrepancies in names, majority of those affected according to investigations are customers that have died whose next of kin are yet to complete the process of withdrawing their savings from the banks.
They blamed their inability to get the money on the stringent bureaucracy in place.
Apart from the customers, there is concern among the banks.
They fear that the order if allowed to be effected will further cripple their finances like Treasury Single Account and stamp duties did which they are battling to recover given the fact the TSA which led to government withdrawing its accounts from banks and the stamp duties which imposed weekly tax on current accounts have done great harm to their finances.
However, pending the appeal by the banks ahead of the substantive suit scheduled forNovember 16, the banks beside sending text messages and electronic mails to customers without Bank Verification Number, asking them to come and complete the biometric registration process are already compiling names of their customers without BVN for publication as demanded by the court order.
The Next Edition’s findings revealed that what informed federal government decision is the drive to track all alleged fraudulent accounts.
The thinking within government is that after three years of the policy with appealed for customers to register their accounts with BVN, any account still not hooked to BVN could be interpreted to be a fraudulent account.
The BVN which was a brainchild of former CBN Governor Alhaji Sanusi Sanusi, now Emir of Kano is a unique identification number that can be verified and used to transact business across all the banking platforms in Nigeria.
The CBN imposed the BVN policy to capture customers’ data for financial transactions and check fraud in the banking system.
Other objectives of the policy were to ensure safety of depositor’s funds, avoid losses through compromise of personal identification numbers and preventing of identity theft.
The initial date for the commencement of the policy was June 16, 2014 while Dermalog BMS, the German company handled the project.
The Nigerian Inter-Bank Settlement System (NIBSS) which is providing the connectivity service for the initiative put the number of those linked to BVN at 40 million as against estimated 70 million total bank customers in Nigeria.