Nigerian commercial banks have closed approximately 2.021 million bank accounts during the first quarter of 2024.
The closures were part of the efforts to sanitize bank records and adhere to regulations requiring all bank accounts to be linked with the National Identity Number (NIN).
The report released by the Nigerian Interbank Settlement System (NIBSS) highlights a stringent crackdown on accounts lacking proper Biometric Verification Numbers (BVN) and NIN linkage, following a directive from the Central Bank of Nigeria (CBN) issued in December 2023.
The directive mandated the restriction of tier-1 accounts that were not linked by March 1, 2024.
The compliance drive appeared to have had a mixed impact on the banking sector’s statistics.
While the number of inactive accounts has surged, rising by 2% to 19.7 million in March from 19.3 million in February, the sector also recorded a substantial increase in active accounts. According to the NIBSS, active bank accounts saw a growth of 6.62 million or 3.0%, totaling 219.64 million up from 213.02 million in the preceding month.
Inactive accounts are those that have not recorded any form of transactions, including deposits, withdrawals, or transfers, for at least six months.
The growth in inactive accounts may reflect the impact of the new compliance measures which could have left some users unable to access their accounts.
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The NIBSS data also revealed that as of April 2024, 61.6 million Nigerians were enrolled with a BVN, marking a critical step towards improving security and transparency within the financial system.
This push towards full compliance is seen as a pivotal step in the CBN’s broader strategy to secure and streamline banking operations, though it presents certain challenges, such as increased account inactivity and potential customer inconvenience.
Banks and regulators are likely to continue refining these initiatives to balance regulatory compliance with customer service.
