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FRAUD WATCH: Banks to start monitoring customers’ accounts

FRAUD WATCH: Banks to start monitoring customers’ accounts
October 20
09:21 2017

The Central Bank of Nigeria (CBN) has directed deposit money banks and other financial institutions to monitor accounts of customers where fraudulent activities are suspected.

According to a regulatory framework for BVN operations and watch-list for the banking industry released on Thursday, banks have the right to bar a watch-listed customer from opening an account or using its electronic service.

“This framework defines the establishment and operations of a watch-list for the Nigerian banking industry, to address the increasing incidences of frauds, with a view to engendering public confidence in the banking industry,” the circular signed by Dipo Fatokun, CBN’s director, banking and payments system department, read.

“The framework, without prejudice to existing laws, is a guide for the operations of the watch-list in the financial system. It provides standards for the BVN operations and watch-list for the Nigerian banking industry.


The watch-list will be a database of bank customers’ identified by their BVNs, who have been involved in confirmed fraudulent activities in the Nigerian banking industry.

According to the circular, five stakeholders will be part of the process, namely the CBN, Nigeria Inter-Bank Settlement System (NIBSS), deposit money banks, other financial institutions and bank customers.

“A watch-listed individual shall not be allowed to enter into new relationship with any bank; a bank may choose not to continue business relationship with account holder on the watch-list.


“Where a bank chooses to continue an existing business relationship with holders of account on the watch-list, the account holder shall be prohibited from all e-channels, such as ATM, POS, Internet Banking, Mobile Banking, including issuance of third-party cheques.

“A watch-listed customer shall not provide reference to another customer, neither shall he/she be allowed access to credit facility or guarantee credit facilities.

“A watch-listed individual shall remain in the watch-list for a period as specified in the penalty table. In the event of a reoccurrence, the tenure shall begin to count from year one. Penalties that applied to watch-listed customers shall apply to all accounts that he or she is a signatory to.”


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