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The House of Representatives has called on the Central Bank of Nigeria (CBN) to temporarily suspend the implementation of the directive that instructs banks to collect and verify customers’ social media handles. The decision was made during the plenary session on Tuesday (July 11, 2023) after the approval of a motion sponsored by nine lawmakers.
Reasons for passing the motion:
The CBN had issued guidelines in June explaining that the purpose of the regulation, which is part of the banks’ know-your-customer (KYC) procedures, is to combat financial crimes and terrorism while improving the accuracy and comprehensiveness of customer identification. According to the CBN, the policy aims to empower financial institutions to gather information about customers’ online presence and activities to better assess potential risks related to money laundering, terrorism financing, and proliferation financing. This directive was released as part of the CBN’s Customer Due Diligence Regulations 2023, which demonstrate its commitment to keeping up with technological advancements and evolving risks in the financial sector.
Violation of privacy rights:
During the motion’s debate, Representative Kelechi Nwogu from Rivers State highlighted that, although the policy is commendable, it infringes upon Section 37 of the constitution, which protects privacy rights. He stated that while the directive may appear laudable, it is unnecessary since financial institutions already possess sufficient customer identification measures such as names, telephone numbers, passport photographs, emails, national identification numbers (NIN), biometric verification numbers (BVN), utility bills, and other essential requirements. He suggested that there are more effective methods for monitoring money laundering and terrorism financing, such as leveraging the Nigeria Police Force (NPF), Nigeria Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC), intelligence agencies, and crime tracking agencies.
Exclusion of semi-illiterate business people:
Representative Nwogu further emphasized that the policy has the potential to exclude traders who are not on social media. He expressed concerns that implementing the directive may cause hardships for millions of Nigerians, particularly illiterate or semi-literate business owners, traders, and entrepreneurs residing in rural areas who do not have social media handles. He warned that these individuals may be compelled or systematically excluded from formal banking systems, leading to negative effects and implications.
A call for revisiting and halting the directive:
In conclusion, Representative Nwogu stressed the need to reconsider and suspend the CBN’s directive in order to alleviate the hardships faced by Nigerian citizens. The motion was unanimously adopted by Tajudeen Abbas, the Speaker of the House and presiding officer.
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