Need for Legislative Oversight on the Central Bank of Nigeria’s New BVN Regulatory Amendments

Abstract

The Central Bank of Nigeria (CBN) has announced new regulatory amendments aimed at strengthening the Bank Verification Number (BVN) framework as part of broader efforts to curb fraudulent financial transactions, money laundering, and terrorism financing within Nigeria’s banking system. The directive, titled “Addendum to the Revised Regulatory Framework for BVN Operations and Watchlist for the Nigerian Banking Industry 2021,” is scheduled to take effect on 1 May 2026 and introduces several new operational rules. Key provisions of the amendment include restricting BVN enrolment to individuals aged 18 years and above, permitting only a one-time amendment of phone numbers linked to a BVN, allowing financial institutions to place BVNs suspected of fraudulent activity on a temporary watchlist for up to 24 hours while investigations are conducted, and limiting access to the BVN database strictly to CBN-licensed financial institutions, with the Central Bank retaining exclusive authority to approve exceptional access. While the objective of strengthening fraud prevention within Nigeria’s financial system is commendable, the proposed measures raise several policy considerations. Restricting BVN enrolment to persons aged 18 and above may affect minors who currently operate bank accounts through guardians or custodial arrangements, potentially impacting Nigeria’s financial inclusion goals. The temporary watchlist provision may also raise consumer protection concerns if adequate safeguards are not in place to prevent erroneous flagging or transaction disruptions for legitimate customers. In addition, limiting phone number amendments to a single change may create operational challenges for customers who change phone numbers due to lost SIM cards, network changes, or security concerns. The amendments also raise questions regarding data governance and privacy, given that the BVN system contains sensitive biometric and financial information. Ensuring that BVN data management aligns with national data protection standards and cybersecurity frameworks remains an important consideration. Given its constitutional oversight responsibility over financial sector institutions, the National Assembly may wish to engage the CBN to ensure that the revised framework effectively balances fraud prevention with consumer protection, financial inclusion, and data governance. Accordingly, the National Assembly, through its Committees on Banking, Finance and Financial Institutions as well as ICT and Cybersecurity, may consider the following actions: 1. Invite the Central Bank of Nigeria to provide a detailed briefing on the operational implications of the new BVN regulatory amendments and the expected impact on banks and financial consumers. 2. Seek clarification on the 18-year BVN enrolment restriction, particularly how it will affect minors currently operating custodial or guardian-managed bank accounts. 3. Request information on safeguards governing the BVN watchlist system, including customer notification procedures and dispute resolution mechanisms where transactions are legitimate. 4. Encourage alignment between the BVN framework and national data protection regulations to ensure secure management of biometric and financial data. 5. Request periodic reporting from the Central Bank on the implementation and impact of the revised BVN framework during the first year of operation. The revised BVN regulatory framework represents an important step toward strengthening Nigeria’s financial security architecture. However, careful legislative oversight will help ensure that the new measures achieve their intended objectives while safeguarding financial inclusion, protecting consumers, and maintaining strong data governance standards within the financial system.