The Bank Verification Number (BVN) is an 11-digit universal identification number which identifies every customer across the Nigerian banking industry with their biometrics information. The Central Bank of Nigeria has now issued a directive to all banks to activate BVN 2.0. But what is the meaning of this BVN 2.0.
What is BVN 2.0
BVN 2.0 is different from the one Nigerians are using now in which all account holders in Nigerian banks require one BVN since it’s a unification system. BNV 2.0 is all about unification of debts. If you are owing a bank, other banks can in the country can help get the money owed back as long as you have an active account with them. This is a loan unification system.
While speaking on the directive, Aishah Ahmad, CBN’s Deputy Governor said and I quote “We are not unaware of the challenges/reasons why credit has not been growing. Part of that was the appetite of banks to lend especially when you have customers that willingly refuse to pay their loans,” she said
“In this respect, we have come up with a new clause that will be included in the offer letters that will be granted going forward.
“This is going to be a credit risk protection clause. Basically, it will contain the BVN details and TIN of the customers and more or less it will be a commitment on the part of the customers that you agree that should you default on the loan, the total amount of deposits you have across the banking industry would be applied towards repaying the loan.
“This is not uncommon because banks already have rights of set-off within a bank. Which means you take money from a bank, the bank usually has a clause in the letter that allows your bank to repay your loan from the assets you have with the bank.”
“This is just extending it across the industry.”
Note: this directive will only apply to new loan applications, it will enable banks to lend confidently with the major beneficiaries being the SME sectors.Pls SUBSCRIBE below to our mailing list to get fresh updates on money making and inspiring articles.