Sanity is coming to the foreign exchange (forex) market, as enforcement of the “No BVN, no forex” policy of the Central Bank begins. End users of forex are now required to submit their bank verification number (BVN) to bureaux de change (BDCs) before they can access forex.
People with illicit flows avoid documentation, just as they avoid the banks. The BDCs have been having difficulty selling the dollars purchased from the CBN. To avoid submitting their BVN, the end users have been patronising the black market, leading to a sharp increase in demand for dollars and the naira depreciating to N230 per dollar from N225.
The CBN made the BVN a criterion for sale and purchase of foreign exchange by banks and BDCs effective November 1. The purpose of the policy, according to a CBN circular issued on October 20, was to stabilize the forex market, stem the rampant cases of forex leakages and illicit money transfers from Nigeria.
The circular stated: “All banks and licensed BDCs operating in Nigeria as well as the general public are, therefore, put on notice that with effect from November 1, 2015, all customers desiring to purchase forex through all available channels in Nigeria must provide their BVN, which shall be validated by the CBN authorised forex dealer through the Nigerian Interbank Settlement System platform before the transactions are consummated.
“For the avoidance of doubt, the CBN shall from November 1, 2015, discontinue sale of forex to the BDCs that had not availed it the BVN of all its directors. Any authorised forex dealer that fails to provide the required information in its returns or provides a wrong BVN would be penalised and this may include the termination of the forex dealership authorisation.”
On Monday, October 26, NIBSS unveiled a USSD and internet channel for verification of BVN. According to Mr. Oluseyi Adenmosun, the BVN Project Coordinator for NIBSS, BDC operators or anybody can dial the short code *565*1# on their phones from any part of the world for the validation. The USSD code when dialed will pop up a message asking for the BVN and the date of birth of the BVN holder to confirm the genuineness of the BVN. The BDC operators also have the option of using the NIBSS website portal for the validation. The service costs N20 per enquiry.