CHAPTER
ONE
INTRODUCTION
BACKGROUND OF STUDY
The
rate at which fraudulent activities is going on in the country these days is
becoming unbearable; the federal government of Nigeria and the CBN have being
on their toes to resolve the issue of frauds and to boost financial security in
most of the Nigerian banking industry; because all these issues the central
bank of Nigeria on February, 2014 made it compulsory that all account holders
should have a bank verification number so as to enable the account holder to
have a single identity in all the banks in Nigeria; all he or she need to do is
to link it with his or her accounts. The essence of this system is to help the
bank in the protection of their customers from theft and other financial/
economic crimes growing in the banking industry (orji, 2014)
The
Bank Verification Nlumber (BVN) is a great step taken by the Central Bank of
Nigeria, to strengthen the financial security and order in the banking sector
of Nigeria. One of the importance of the BVN is that transactions will be safer
once all protocol is duely observed. The essence of this BVN exercise is to
ensure that bank transactions are safer and fraudulent transactions are
minimized, if not totally eliminated. The central bank of Nigeria have put in
alot of effort to see the success of this excercise, but the general public do
not know the importance of the bank verification number; but they started
seeing the importance of the bank verification number when the cental bank made
it clear that the excercise will stop by october 2015.
The
bank verification number system uses biometric technology to register customers
in the banking sector. It records these physical features which are unique to
individuals fingerprints and the face; this techniques was made effective
because every individual has his or her own unique finger prints. The record
would be used to identify the person afterwards. Once a person’s biometrics
have been recorded, and BVN issued the account would be accessed through BVN.
The major objectives of the initiative are to protect bank customers, reduce
fraud and strengthen the Nigerian banking system. Biometric enrolment is
helpful to people who cannot read and write. Their finger prints and pictures
would serve the same purpose as signatures.
1.2
STATEMENT OF THE PROBLEM
Without
doubts, Nigerian banking sector has contributed to the growth and development
of the Nigeria. The Nigerian banking sector has maintained the inflow of money
in the country so as to stabilize the co untry’s economy. According to Udenze,
2014; stated that growth in this sector has been reduced due to high cases of
economic and financial crimes; fraud and money laundry have significant effect
on the financial security in the Nigeria banking industry. They have caused
damage to the reputation of the image of the country, loss of FDI, poor
infrastructural development, dwindling confidence and distortions in our
political as well as financial systems, among other things.
In
view of these crises crimes perpetuated by cyber thieves, the mandatory bank
verification number exercise embarked by various banks nationwide has also
caused congestions in banking halls. Although the exercise commenced since
February, 2014, the fire brigade approach of most Nigerians has warranted most
bank halls to be filled to its maximum capacity. Queues in some banks even
extended outside the banking hall. This development has caused confusion in
some banking halls as other transactions are placed on hold due to inadequate
staff to attend to clients or delayed indefinitely
1.3 OBJECTIVES OF THE STUDY
The
main object of the research work is to elicit information on the impact of BVN
on financial security in Nigerian Banks. Specific objectives of the study are:
To
monitor effect of the bank verification number on the level of financial crimes
in Nigeria
To
give everyone access to a single account
To
help limit multiple account by a single owner.
To
investigate the role of the central bank of Nigeria in the implementation of
the bank verification number system
To
investigate the impact of BVN system on the level of financial safety in the
Nigerian banks.
1.4 RESEARCH QUESTIONS
1.
What are effects of the BVN on the level of financial crimes in Nigeria?
2.
What is the impact of BVN system on the level of financial safety in the
Nigerian banks?
3.
What are roles of the central bank of Nigeria in the implementation of the BVN?
1.5 SIGNIFICANCE OF THE STUDY
The
research work is a very important one as it will investigate the the role of
the central bank of Nigeria in the implementation of the BVN system, the study
will discuss the importance of bank verification number, the bank verification
number initiatives will help limit every one to single account so as to monitor
the level of financial crimes in Nigeria. The study will also discuss the role
of the central bank of Nigeria in the implementation of bank. verification
number system. Finally, the study will discuss the role of bank verification
number on the level of security.
1.6 SCOPE OF STUDY.
The
research work is limited to the study of the impact of BVN on financial security
in Nigeria banks using Central Bank, Uyo as a case study.
1.7 LIMITATION OF STUDY.
The
study is limited to Central Bank of Nigeria, Uyo branch.
REFERENCES
Udenze,
B. (2014). BVN: CBN targets 80% fraud reduction in
banking
sector. Obtainable at http://sunnewsonline.com/new/bvn-cbn-targets-80-fraud-reduction-banking-sector.
Orji,
V, O. (2015). Knowledge management systems: Issues,
challenges,
and benefits. Communications of the Association for Information Systems, 1(7)