Banks Close Two Million Accounts, Give Reason

This action is a component of ongoing measures to guarantee adherence to regulatory directives on bank account linking to the National Identity Number, or NIN.

Nigerian commercial banks closed 2.021 million bank accounts in the first quarter of 2024, or Q1’24.

In order to purge dubious accounts and clear their records of dishonest behavior, the financial institutions terminated the bank accounts.

The move is also part of effort to ensure compliance with regulatory orders on the linkage of bank accounts to the National Identity Number, NIN.

The development is contained in a report by the Nigerian Interbank Settlement System, NIBSS.

As to the data, the quantity of deactivated bank accounts increased by 2.0%, or four million, on a month-over-month basis, from 19.3 million in February to 19.7 million in March 2024.

A bank account is classified inactive when it records zero transactions including deposits, withdrawals, transfers or point-of-sale transactions for six months.

However, details of the “Industry Bank Account Database”, a monthly data reported by banks, and compiled by the Nigerian Interbank Settlement System, NIBSS, also indicated that the number of active bank accounts grew by 6.62 million or 3.0 per cent to 219.64 million from 213.02 million in February.

Recall that in December 2023, the CBN issued a directive to all commercial banks in the country to restrict tier-1 accounts without proper Biometric Verification Number, BVN, and National Identity Number, NIN, that are not linked by Thursday, March 1st, 2024.

According to NIBSS data on BVN enrollment count, 61.6 million Nigerians have BVN as of April 2024.

The two million bank accounts that were closed highlight the difficulties and factors that must be taken into account when putting regulatory obligations like NIN linking into practice.

Two million bank accounts have been closed in Nigeria, which highlights the significance of regulatory compliance and the difficulties in putting complex regulations like NIN linking into practice. Although the widespread account closures could temporarily upend the banking industry, they also offer chances for creativity, teamwork, and customer empowerment. Through a focus on technology progress, customer care, and openness, the Nigerian banking sector may effectively traverse regulatory constraints and cultivate a more robust and inclusive financial ecosystem that benefits all parties involved.

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