A Critical Assessment of the Role of Bank Verification Number (BVN) in Reducing Fraud in Nigerian Banks
Chapter One
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.
CHAPTER TWO
LITERATURE REVIEW
This section use pool of knowledge of other scholars to address the three objectives of this study listed in previous chapter. It tends to discuss the work materials and opinions expressed by various authoritative authors, researchers and writers that relate to the objective of this study, which is major on bank verification number (BVN). The following subhead will be discussed on this chapter. They are:
2.1 Conceptual Framework
2.2 Theoretical Framework
2.3 Empirical Framework
2.4 Summary of Literature Review
Conceptual Framework
The financial institution is a vital institution responsible for regulating the financial activities of the nation. The financial situation of an economy to a large extent depends on the performance of the financial institution. It is therefore necessary for this institution to regulate, control and promote the financial capability of the economy. This can be done through the adoption of some technological innovations such as the Bank Verification Number (BVN), cashless policy, electronic banking etc. The adoption of these technological innovations also necessitates the desired to increase the level of customer satisfaction and banking confidence in customers (Bamiduro, & Ibojo, 2015).
The key aim of bank verification number in Nigeria is to control, check, minimize money laundering and banking crime. Especially in the situation where an individual has more than 30 bank accounts with different date of birth, state of origin and other information on different account. This is the major difference between Bank Verification Number and other e-banking policies. NEITI (2016) Nigeria, as Africa’s biggest economy and most populous country, and as a country highly exposed to the negative impacts of anonymous companies, Nigeria should seize the opportunity to lead the charge in the growing campaign for full disclosure of ownerships of companies and bank account across the country.
This is a situation whereby one person bears two names e.g. Mr. Tunde Chukwu registers in bank A and has account with bank B as Mr. Tunde Usman so charity the process of reconfirmation of his BVN at the second bank his biometric will real his identity as dual. A case where an individual collected 60 salaries from federal servant commission or NYSC wages can be checkmate and reduce with the help of BVN policy. This control by the policy will help create job and improve Nigeria GDP because of usefulness of manpower.
If the rate of money laundering and bank crime is minimized, it will help to boost the GDP of Nigeria economy. This is because a lot of money that go into individual accounts will be utilized in Nigeria economy and used to the societal development. The rate whereby politicians and contractors stole Nigeria resources will be minimized and help in improving infrastructure and development. This would also help in achieving improved and sincere documentation of the country’s financial assets.
It is in the best interest of Nigeria and Nigerians as full ownership disclosure has practical implication for increasing government revenues, reassuring investors interested in partnering with local companies, reducing the incidence of corruption and money laundering, and cutting off funding for drug lords and terrorists. Full ownership disclosure will facilitate the present thrust of the Nigerian government to trace, recover and repatriate the country’s stolen assets in foreign jurisdictions. At present the problematic process of recovery of stolen assets in other jurisdictions is compounded by absence of relevant information occasioned by secrecy and opaqueness of the real actors behind the transactions (NEITI, 2016).
Banking Reform and E-Banking
A vibrant banking industry in any country is pivotal to achieving economic growth development through efficient financial services as they provide a mechanical system to group savings and convert them into investment. Thus, a bank serves as an intermediary between savers or depositors and borrowers (Olanipekun, et al 2013). This is why the government establishes bank regulating bodies like Central Bank of Nigeria (CBN). These regulating bodies from time to time reform the sector to meet the current economic standard.
Financial reforms and attendant policy prescriptions are age-long phenomena. They represent the various transformation and policy adjustments and overhaul that are directed at the art, practice, and activities of financial institutions and markets overtime in response to the nominal need for operation improvement and growth of both the institutions and the general economy. (Iganiga, B. O. 2010).
Electronic banking is the conduct of banking business electronically which involves the use of information communication technology to deliver banking business for immediate and future goals. (Daniel 1999).
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
In this chapter, we would describe how the study was carried out.
Research design
It is a term used to describe a number of decisions which need to be taken regarding the collection of data before they are collected. (Nwana, 1981). It provides guidelines which direct the researcher towards solving the research problem and may vary depending on the nature of the problem being studied. According to Okaja ( 2003, p. 2),” research design means the structuring of investigation aimed at identifying variables and their relationship, it is used for the purpose of obtaining data to enable the investigator test hypothesis or answer research question by providing procedural outline for conducting research”. It is therefore, an outline or scheme that serves as a useful guide to the researcher in his efforts to generate data for his study.
Research settings
This study was carried out in Uyo CBN Branch.
Sources of Data
The data for this study were generated from two main sources; Primary sources and secondary sources. The primary sources include questionnaire, interviews and observation. The secondary sources include journals, bulletins, textbooks and the internet.
Population of the study
A study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description (Udoyen: 2019). In this study the study population constitute of all the staff of Central bank of Nigeria, Uyo branch.
CHAPTER FOUR
PRESENTATION OF RESULT AND ANALYSIS
Introduction
This chapter deals with data presentation, analysis and interpretation. As indicated in the introductory chapter the main instruments of this research are the questionnaires, followed by the interviews (even though secondary sources were used). Out of one hundred and twenty questionnaires administered, one hundred and eight were filled and returned. This shows that ninety percent of the total number of questionnaire administered were analyzed.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
In this study, our focus was to carryout A critical assessment of the role of bank verification number (BVN) in reducing fraud in Nigerian banks. (a case study of central bank of Nigeria, uyo branch). The study specifically was aimed at ascertaining the role of bank verification number (BVN) in reducing fraud in Nigerian banks. This study reviewed and anchored its framework on Routine Activity Theory.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 133 responses were validated from the enrolled participants where all respondent are active workers in the central bank of Nigeria in Uyo.
The study also concluded that before the introduction of BVN in the the Apex Bank have a positive and significant effect on diversion of fund. The study found that after the implementation of BVN have a positive and significant effect on diversion of fund. The study also realized that before the introduction of BVN have a positive and significant effect on money laundering.
The study recommended that:
Central Bank of Nigeria should continue to implement BVN in transacting business by carefully observing customers’ biometrics such as fingerprint, signature, pins, 11 digits numbers to prevent corrupt business practices in the bank. The bank branches should ensure that they established a unit that will be responsible to see that the implementation of BVN is to carry out in the branches of the United Bank for Africa. They should monitor the customers’ accounts daily.
REFERENCES
- Adewale et al (2014). Biometric Enabled E-Banking in Nigeria: Management and Customers’ Perspectives. Informational and Knowledge Management vol. 4. No 11. 2
- Adewoye, J. (2013). Impact of Mobile Banking on Service Delivery in the Nigerian Comical Banks. International Review of Management and Business Research Vol. 2. Issue 2.
- Bamiduro, & Ibojo, (2015). Impact of electronic- banking on the performance of Nigerian banks in Oyo state, Nigeria. Ilorin Journal of Marketing 2 (1 ).
- Database Systems (2005). A practical Approach to Design, Implementation and Management. Addison Wesley. Fourth
- FFIEC (2001). Federal Financial Institutions Examination Council (FFIEC) agencies, Authentication in an Electronic Banking Environment.
- Hazell and Ziad (2001), Internet Banking: Disruptive Or Sustaining Technology? Field Project Report submitted to Harvard Business School Boston, MA.
- http://connectnigeria.com/articles/2014/12/benefits-of-having-your-bank-verification-number/