FRAUD WATCH: Banks to start monitoring customers'

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.”

TheCable