By Omodele Adigun

As the country struggles to attain 70 per cent financial inclusion of its adult population by 2020, financial sector stakeholders have been wondering whether the would come with the validation of customers’ Bank Verification Number(BVN) by Bureau de Change (BDCs) operators  before foreign exchange (forex)transactions are consummated?

This is a burning question on the lips of many as one of the stakeholders, Alhaji Aminu Gwadabe,  the President of the Association of Bureau De Change Operators of Nigeria (ABCON), gave assurance that the move, apart from bringing transparency to the forex market, will also promote financial inclusion and get more people into the financial services net.

“People who are not connected to the financial system but want forex will have no option than to open account with commercial banks and obtain their BVNs. It is our own contribution to CBN’s financial inclusion project and determination to take financial services to the grassroots,” Gwadabe said.

This is a plausible move since the rate of financial inclusion in the country is far from being encouraging. For instance, the National Financial Inclusion Strategy (NFIS) implementation report released last  Thursday puts the current financial inclusion rate at 48.6 per cent and the percentage of adults owning a bank account, proxied by the percentage of adults having BVN, at 28 per cent. This is a far cry from the 70 per cent target of the adult population expected to have access to formal financial services by 2020. The NFIS was launched on October 23, 2012 to reduce the percentage of adults who do not have access to any formal or informal financial services from 46.3 per cent in 2010 to 20 per cent by 2020.

The Central Bank of Nigeria ( CBN) had directed all licensed BDCs to ensure that all their transactions have the BVN of the buying customers. “The information must be included in the forex returns to the regulator. In the case of corporate customers, the BVN of a director of an authorised signatory of the entity must be provided to the BDC which shall be validated by the CBN authorised forex dealer through the Nigeria Interbank Settlement System (NIBSS) platform before the transactions are consummated.”

The apex bank  had warned that any authorised forex dealer that fails to provide the required information in its returns or provides a wrong BVN would be penalised; this may include the termination of the forex dealership authorisation.

To comply and avert this, ABCON is currently in handshake with NIBSS on the use and deployment of the BVN Validation portal. And they have organised sensitization programmes for the over 3500 BDCs across the country. The ABCON boss said the sensitization programme was part of its confidence-building agenda to ensure that BDCs abide by forex rules.

“The programme , held across the six geopolitical zones in the last two months,– namely Kano, Lagos, Awka and Abuja, among others,  is our input into the CBN’s policy implementation. It is an opportunity to take confidence-building in BDCs’ operations to greater heights. ABCON leadership has zero tolerance for its members that breach operational guidelines,” he said.

Gwadabe explained that to ensure a hitch-free implementation of the directive, the CBN has continuously provided list of all licensed BDCs to the NIBSS to enable it provide the necessary hardware token that would be used by the BDC in accessing the NIBSS portal.

The NIBSS has subsequently made the portal available on its website to facilitate access for the confirmation/validation of the BVN number of the BDCs’ customers.

NIBSS Managing Director, Ade Shonubi, confirmed that the portal was developed to enable BDCs comply with the CBN’s directive. He also noted that such exercise would bring transparency in the market and prevents multiple supply of forex to single individuals, adding that  NIBSS had deployed two services on the Web and phone to make the exercise  as easy as possible.

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Shonubi said customers are charged for both phone transaction and the web portal which the customer would be required to pay either with credit card or internet banking.

According to him, the essence of the verification is to checkmate sharp practices among BDCs operators and customers. He, however, noted that once a customer carries out the verification either on phone or the Web portal, such customer does not need to verify again when dealing with the same BDC operators.

These were some of the issues that BDCs that participated in the sensitization were taught. Gwadabe said. He added that the programmes were meant to enlighten them on the usage and deployment of BVN Validation Portal for industrial benefits.

The ABCON  boss said the world is going digital, and BDCs under his leadership must stay ahead of the competition by deploying time-tested technology to deliver effective services to their numerous customers.

However, Gwadabe appealed to the CBN to help BDCs reduce rising bank charges associated with their transactions. “BDCs are charged N1,000 per N1 million transactions and with each operator paying as much as N67,000 for the N67 million monthly transactions. These charges are too high, and I urge the CBN to help reduce the charges which are becoming huge burden to  BDC operators,” he said. Investigation , however, showed that each of the 3,500 BDCs carry out transactions worth N16.8 million weekly, which comes to N67 million turnover and N67,000 maintenance fee  monthly. Gwadabe disclosed that this fee has made it difficult for many BDCs to stay profitable in the business because of the rising operating costs, including overhead. “I appeal to the CBN to address this challenge so that the market will continue to enjoy ongoing stability,” he said.

BVN has now  become a tool for fighting sharp practices in the forex market. It has also been deployed by the CBN to achieve transparency in forex deals and sustain exchange rate stability.

The impact has been the swift recovery of the naira from over N520/$1 in February to N361/$1 at the parallel market, a development that has continued to marvel financial pundits.

Even the office of  the Value Assets and Income Declaration Scheme (VAIDS) has said that it is in interagency cooperation to obtain information from BVN, among other sources, to create an accurate financial picture of Nigeria’s taxpayers.

And So far, the VAIDS officials have laid their hands on the data of over five million corporate organisations and individuals.

Analysts believe that the policy will bring  positive outcomes  for the Bureau de Change business and the econom. It is expected that more customers, seeing the level of transparency and data integrity in the BDC’s operation, will be motivated to give them more businesses.                                                                      “Even local and international investors, including Diaspora agencies are more likely to commit their funds to BDCs as the sector becomes more transparent,” Gwadabe said.

He explained that in many advanced countries, BDCs are direct agents of International Money Transfer Operators (IMTOs) because of the established transparency and infrastructure in those countries. The ABCON leader said the BVN Validation portal is one of the infrastructures now available for BDCs to compete favourably and take over the retail-end of the forex market that rightly belongs to them.