In its recently released ‘Central Bank of Nigeria (Customer
Due Diligence) Regulations, 2023’ document, the apex bank asked financial
institutions to use the social media handle, amongst other things, of their
customers to verify their identity.
There are only 31.6 million Nigerians on social media,
according to Statista, as of January 2023. Using social media as a means of
identification is projected to further strengthen customer due diligence
regulations and deepen the identification process in the banking system, the
apex bank noted.
In the customer identification column, the banking regulator
listed new requirements that financial institutions must use to identify their
customers (whether permanent or occasional, and whether natural or legal
persons or legal arrangements).
It read in parts, “For Individuals — legal name and any
other names used (such as maiden name), permanent address (full physical
address), residential address (where the customer can be located), telephone
number, e-mail address, and social media handle; date and place of birth, Bank
Verification Number, Tax Identification Number, nationality, occupation, public
position held, and name of employer.”
The apex bank also noted that all banks and other financial
institutions must start direct compliance. Of the 31.6 million Nigerians on
social media, 21.75 million are on Facebook, according to DataReportal.
The data insight firm highlighted that 7.10 million
Nigerians use Instagram, 7.50 million are on LinkedIn, 12.35 million are on
Snapchat, and 4.95 million are on Twitter as of early 2023.
According to the CBN, its new regulation is to create
additional customer due diligence measures for the financial institutions under
its regulatory purview. It noted that these measures will help these
institutions against money laundering and more and is in line with
international best practices.
The President of the Bank Customers Association of Nigeria,
Dr Uju Ogunbunka, noted to The PUNCH that the idea was good and would prevent
fraudulent activities.
He said, “It is to ensure that they prevent fraudulent
activities. It is a good idea because everyone wants to be protected. Whatever
will be done to make sure that customers are protected and secured is seen as
okay.
“However, the question we should be asking is if it is a
requirement for all customers. Because not everyone is on social media, I will
suggest that it is based on availability, i.e., if a customer has it. If a
customer doesn’t have it, there are other things that can be done to protect them,
after all, we have not been using social media handles until now.”
Meanwhile, the Socio-Economic Rights and Accountability
Project, has said that using social media has an identification requirement is
in violation of Nigerians’ rights to freedom of expression and privacy and is
inconsistent and incompatible with the rule of law.
It said, “The mandatory requirement of social media handles
or addresses of customers does not serve any legitimate aim. Such information
may be used to unjustifiably or arbitrarily to restrict the rights to freedom
of expression and privacy.
“SERAP is gravely concerned that the CBN Regulations and
directive to banks and other financial institutions would impermissibly
restrict the constitutional and international rights to freedom of expression,
privacy and victims’ right to justice and effective remedies.”
On Monday, SERAP tweeted that it was suing the apex over its
regulation. It tweeted, “We’re suing the Central Bank of Nigeria over the
unlawful mandatory regulations demanding details of bank customers’ social
media handles as a form of identification.
“Please indicate your interest to join the suit by stating
your names.”