CBN Warns Banks over Non-reversal of Electronic Transactions Dispense Errors

By Obinna Chima

Inundated by complaints from bank customers over delays and most times non-reversal of dispense errors encountered during electronic transactions, the Central Bank of Nigeria (CBN) has said it will start monitoring banks to ensure that dispense errors are automatically reversed and the account of the customer credited.

The CBN, which said banks that continue to err would be sanctioned, added that it plans to extend the Bank Verification Number (BVN) registration to customers of other financial institutions such as Microfinance Banks (MFBs) and Primary Mortgage Institutions (PMIs), among others.

The CBN Director, Banking and Payment Systems Department, ‘Dipo Fatokun, said this at the Finance Correspondents Association of Nigeria (FICAN) Bi-monthly forum hosted by the central bank in Lagos at the weekend. He spoke on the topic: “Recent Developments in the Electronic Payment System and Implication for Customers.”

Fatokun said the central bank had received complaints from customers against some banks which dispense errors are not reverted even after complaints had been lodged by the customers to their respective banks.

The CBN had last year directed that banks programme their systems such that partial or non-dispense error by automated teller machines are automatically rectified. However, not all banks have complied with this directive.

But Fatokun explained: “We discovered that many of these dispense errors that were not returned to the customers were sitting as idle balances for the banks. So what we have done is that from last year, banks are supposed to electronically return the money for either a non-dispense error or partial dispense error.

“We will soon start monitoring the banks because almost all the banks have given us statistics of what they claim they have returned to their customers. The system should be automated such that whether a customer complains or not, when there is a partial dispense or non-dispense, such customer’s account should be refunded and if it is not refunded, then they stand liable.”

The central bank director also said banks that offer services through USSD on their mobile phones should ensure their customers are protected.

Throwing more light on the proposed BVN enrollment for MFBs and other financial institutions, Fatokun said deposit money banks would serve as registration points but customers of the MFBs and PMIs would have to verify their BVN at their respective financial institutions.

He however did not specify if there would be a deadline such as the one given to customers of commercial banks.

Fatokun argued that the BVN project had helped reduce the number of bank frauds in the industry.

“I want to assure you that the BVN has assisted us a lot in the banking system. It has assisted us to check frauds, and we are working on a framework that will enable us not to blacklist customers, because of some legal implications, but at least to watch-list a customer that is identified to have been fraudulent, or have done what he is not supposed to do across the banking sector,” he said.

The CBN director said the number of BVN linked to customers’ accounts as at August 23, this year was 36.7 million, while the total number of individual customers in the banks was reported as 59.9 million as at the same date.

“Any bank customer resident in Nigeria without a BVN would be deemed to have inadequate KYC while effort is on-going to ensure that customers of Other Financial Institutions (OFIs) such as Microfinance Banks (MFBs) and Primary Mortgage Institutions (PMIs) are brought into the system and begin to get their BVNs,” he said.