A Federal High Court has affirmed NIBSS’s legal authority to manage Nigeria’s BVN database.
The ruling backs CBN’s regulatory power and dismisses privacy rights concerns raised in court.
The Federal High Court in Abuja has upheld the legal authority of the Nigeria Inter-Bank Settlement System Plc (NIBSS) to maintain and manage the Bank Verification Number (BVN) database across Nigeria. The decision, delivered by Justice James Omotosho on Friday, affirms that NIBSS operations are fully supported by the Central Bank of Nigeria (CBN) Act and the Banks and Other Financial Institutions Act (BOFIA) 2020.
The judgment arose from a suit filed by Wolemi Esan, SAN, lead counsel for NIBSS, seeking legal clarity and protection over NIBSS’s statutory role in managing the BVN. The Incorporated Trustees of the Digital Rights Lawyers Initiative, the CBN, and the Attorney General of the Federation were named as the first to third defendants in the case.
Esan had asked the court to declare that NIBSS control of the BVN database does not violate any citizen’s constitutional right to privacy. He also sought a perpetual injunction to restrain any individual or institution from disputing NIBSS legal authority to operate the BVN framework.
NIBSS argued that its mandate is derived from laws that empower it to develop and manage an integrated network for digital payments and financial transactions in Nigeria. The company accused the Digital Rights Lawyers Initiative of repeatedly filing lawsuits, either directly or through proxies, to challenge its operations.
Supporting NIBSS, CBN’s counsel, Kofo Abdulsalam-Alada, emphasized that the apex bank’s directive to NIBSS on BVN development and administration stems from an apparent legal authority. He referenced Section 47(2) of the CBN Act, which authorizes the Central Bank to develop payment and settlement systems for the country’s financial sector.
Abdulsalam-Alada insisted that the BVN does not infringe on any constitutional rights but instead enhances national financial security and public interest protections.
In his judgment, Justice Omotosho sided with the arguments presented by both NIBSS and the CBN. He ruled that the CBN has the power to issue regulations governing financial systems, including the BVN framework, under the BOFIA Act and the CBN Act.
“The court affirms that NIBSS is legally empowered to manage the BVN. This does not breach any citizen’s right to privacy under Nigerian law,” Omotosho ruled.
He issued a perpetual injunction restraining the Digital Rights Lawyers Initiative or any other parties from disputing NIBSS role in the BVN administration. The judge declared the verdict ‘a judgment in rem’, a decision that applies universally, not just to the parties involved, unless overturned on appeal.
This landmark ruling effectively settles long-standing legal questions about NIBSS role in Nigeria’s financial infrastructure. The judgment also fortifies CBN-backed efforts to centralize identity verification through the BVN, which links a unique number to each bank customer and all their accounts in Nigeria.
The court’s decision reaffirms NIBSS crucial role in the country’s evolving digital banking ecosystem, providing legal closure after years of litigations aimed at questioning its operational mandate.
