A high-profile legal case in Nigeria could reshape the country’s biometric banking infrastructure, as the Federal High Court in Abuja prepares to rule on July 4, 2025, on the Nigeria Inter-Bank Settlement System (NIBSS) Plc’s authority to manage the Bank Verification Number (BVN) database. The outcome could have lasting implications for biometric banking security and data governance in Nigeria’s financial ecosystem.
Court Weighs NIBSS Mandate and CBN Oversight
The case, filed by NIBSS, seeks declaratory and injunctive relief to affirm its mandate to manage the BVN system. It also asks the court to restrain any other institution from interfering with or challenging its operational role. The lawsuit cites provisions from the Central Bank of Nigeria (CBN) Act, the Banks and Other Financial Institutions Act (BOFIA), and the 2021 Revised Regulatory Framework for BVN Operations.
NIBSS is represented in court by Mr. Babatunde Ige and lead counsel Wolemi Esan, SAN. During arguments, they pointed to Section 47(2) of the CBN Act, which empowers the central bank to promote and facilitate effective payment and settlement systems. NIBSS maintains that its role in managing the BVN infrastructure aligns with this mandate and is essential for preserving the integrity of Nigeria’s financial system.
However, the Central Bank of Nigeria and the Attorney-General of the Federation, joined by the Incorporated Trustees of the Digital Rights Lawyers Initiative, are listed as defendants in the case. Counsel Kofo Abdulsalam-Alada, representing the CBN, argued that the BVN database is a regulatory asset of the central bank and should not be treated as proprietary to NIBSS.
Multimodal Biometric System at the Center
The BVN system currently secures more than 64 million Nigerian bank accounts using multimodal biometric authentication. The system collects both fingerprint and facial images, along with basic biodata, to uniquely identify customers across financial institutions and prevent fraud.
Nigeria first deployed biometric banking solutions using certified Integrated Biometrics scanners starting in 2019. Since then, the system has evolved into one of the continent’s most robust identity authentication frameworks. The 2021 regulatory framework further expanded fraud-prevention protocols and integration with national KYC policies.
The dispute over database control comes as NIBSS and other government agencies collaborate on a new multipurpose biometric ID card. The card is expected to unify BVN data with national identity records, offering a single credential for financial services, social welfare, and public sector programs.
Observers say a ruling that limits NIBSS’s role could require a re-architecture of Nigeria’s biometric payment rails, potentially slowing down progress in fraud prevention and digital inclusion. The July 4 decision by Justice James Omotosho will likely clarify the legal boundaries between regulatory oversight and operational management within the country’s evolving biometric identity landscape.
Sources: The Guardian, Instagram
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May 28, 2025 – by Ali Nassar-Smith
