The House of Representatives has mandated its Committees on Digital and Electronic Banking, Finance, Banking Regulations, and Financial Crimes to invite the Governor of the Central Bank of Nigeria (CBN) and the Group Managing Directors (GMDs) of all commercial banks and other financial institutions utilising point of sale (PoS) services to appear before the Committees and find immediate and lasting measures over the challenge of verifiable documentation of POS users and report back within four legislative weeks.
The resolution followed the adoption of a motion on the ‘Need to Implement Verifiable Documentation of PoS Users’ and Fund Recipients’ Identities in Nigeria,’ moved by Hon. John Okafor at plenary on Wednesday.
Okafor noted the increasing challenges posed by the undocumented identities of PoS users and fund recipients in Nigeria, leading to opportunities for fraudulent activities within the financial system and the necessity to combat such illicit practices and safeguard the integrity of financial transactions within Nigeria.
He informed the House that undocumented PoS transactions from both parties create a loophole for fraudulent activities, such as identity theft, money laundering, and unauthorised transactions.
Also, by enforcing the documentation of users’ identity, the incidence of fraud will significantly reduce and the security of financial transactions in Nigeria would be enhanced, adding that proper documentation of PoS users’ identity fosters accountability among operators and users.
“This transparency will help trace transactions back to the individuals involved, holding them accountable for illegal activities conducted through the PoS system, and ensure a lasting end to the criminal use of PoS,” he added.
The lawmaker further stated that there was an obvious regulatory bias and enforcement challenge towards due process by the relevant regulatory bodies and the urgency for immediate intervention to avert this ugly situation and shield Nigerians from the hands of criminalities through the use of the POS system.
“Establishing a system for verifiable documentation of POS users’ and recipients’ identity aligns with the national and international financial regulatory requirements with the objective of preventing financial crimes and ensuring compliance with anti money laundering (AML) and know your customer (KYC) regulations.
“Implementing stringent identity verification measures will protect consumers and businesses from becoming vulnerable to fraudulent schemes carried out through POS transactions.
“Additionally, the process will build trust in the financial system and encourage greater participation in the growing cashless transactions system in Nigeria,” he added.
Juliet Akoje
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