AFRICA

Lawmakers Tell CBN To Halt Addition of Social Media Handles To KYC Requirements

Nigeria’s House of Representatives on Tuesday urged the Central Bank of Nigeria to halt the addition of social media handles on “Know Your Customer (KYC) requirements” in Nigeria.

The House also mandated its Committee on Banking and Currency (when constituted) to investigate the matter and report back within three weeks for further legislative action.

The resolutions followed the adoption of a motion sponsored by Hon. O. K. Chinda, Hon. Laori B. Kwamati, Hon. Kelechi Nwogu, Hon. Ginger Onwusibe, Hon. Mark Essiet, Hon. Abdulsamad Dasuki, Hon. Victor Ogbuzor, Hon. Blessing Amadi and  Hon. Fred Agbedi.

Presenting the motion, Nwogu recalled the recent directive by the central bank to commercial banks on the addition of social media handles on KYC requirements, thus making it mandatory for commercial banks to comply.

He, however, noted that, “obtaining the additional information, would be useful to financial institutions in accessing customers’ online presence and activities, thus enabling better assessment of potential risks associated with money laundering, terrorism financing and proliferation financing.”

Nwogu said, “as laudable as this directive may appear, it may be unnecessary as it is likely to bear pressure on teeming Nigerian masses at a trying period. This is cognisant of the fact that this directive by the CBN is in conflict with the provision of Section 37 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) on the right to privacy of citizens.

“This is also cognisant of the fact that banks in the country already have the names, telephone numbers, passport photographs, emails, National Identification Number (NIN), Biometric Verification Number (BVN), utility bills and other basic requirements with which to identify, know and monitor customers.

“There are better means of monitoring money laundering, terrorism financing, and proliferation financing, such as the Nigeria Police Force (NPF), Nigeria Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC), intelligence and crime tracking agencies, amongst others.”

He further stressed that if the directive takes effect, Nigerians who are not on social media, with large turn overs from their businesses and trades, would be compelled to or systematically excluded from formal banking systems with its attendant negative effects and implications.

“Implementing the CBN’s directive at this point may clearly be unnecessary as it is likely to bear a lot of pressure on teeming Nigerian masses,” he said.

However, the House also mandated its Committee on Legislative Compliance (when constituted) to ensure implementation.

In the meantime, the House of Representatives on Tuesday mandated its Committee on Banking and Currency (when constituted) to investigate the issue of excess charges and illegal deductions by commercial banks in Nigeria and to report back within four weeks for further action.

The resolutions followed the adoption of the need to stop the excessive charges and illegal deductions by commercial banks in Nigeria sponsored by Hon. Godwin Offiono during plenary.

Offiono, alleged that some banks and financial institutions in Nigeria indulge in the unethical practice of fleecing their customers through excess charges and unauthorised deductions.

“Customers of different commercial banks are groaning over excessive charges on their accounts. The financial institutions known as Deposit Money Banks (DMBs) have reportedly introduced different deductions to increase their income, a development that is uncomfortable with customers,” he added.

“Apart from stamp duty, bank customers also pay Value Added Tax (VAT) charges applicable on all VATable transactions in their account.

“Commercial Banks are charging outrageous interest on loans, and overdraft at a rate that is higher than the agreed rate in the offer letter. The arbitrary increase in the interest rate on loans and overdrafts and increase in the other fees without notifying and getting customer’s consent as stipulated in the Central Bank /Chartered Institute of Bankers of Nigeria (CIBN) guideline,” he added.

Nume Ekeghe in Lagos and Juliet Akoje in Abuja

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