The Federal High Court in Abuja has affirmed that the Nigeria Inter-Bank Settlement System Plc (NIBSS) is legally empowered to manage and maintain the Bank Verification Number (BVN) database across Nigeria, in line with the Central Bank of Nigeria (CBN) Act and other relevant financial laws.
Justice James Omotosho delivered the ruling on Friday in a case brought before the court by Senior Advocate of Nigeria Wolemi Esan, lead counsel to NIBSS. The suit sought judicial protection for the agency’s mandate after years of legal challenges, particularly from the Incorporated Trustees of Digital Rights Lawyers Initiative, which had argued that BVN data management breached citizens’ constitutional right to privacy.
The court rejected those claims.
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“NIBSS has the power to manage the BVN,” Justice Omotosho said, citing the CBN Act of 2007 and the Banks and Other Financial Institutions Act (BOFIA) 2020.
“The court grants the reliefs of NIBSS as prayed.”
Legal Background: A Pushback Against Repeated Lawsuits
The case was initiated by NIBSS in response to what it described as multiple suits filed by the Digital Rights Lawyers Initiative — either directly or through proxies — challenging the legal basis of its data handling role.
In its filings, NIBSS sought the court’s declaration that it had not violated any constitutional privacy rights and requested a perpetual injunction barring future legal actions that contest its role. Specifically, it asked the court to restrain any person or group “from contesting the plaintiff’s statutory authority to maintain and manage the BVN database.”
The CBN and the Attorney General of the Federation were also joined as defendants. The CBN, represented by Kofo Abdulsalam-Alada, backed NIBSS, submitting that its role in developing payment infrastructure, including the BVN framework, is fully rooted in statutory provisions. He pointed to Section 47(2) of the CBN Act, which empowers the central bank to develop secure payment and settlement systems across Nigeria’s financial sector.
Abdulsalam-Alada said the BVN initiative was essential for public interest and security, describing it as a necessary safeguard against fraud, identity theft, and financial crimes in the banking ecosystem.
“The initiative does not infringe on the constitutional right to privacy but rather serves as a necessary tool for safeguarding public interest and enhancing financial security,” he told the court.
Court Verdict: A Judgment “In Rem”
In a decisive ruling, Justice Omotosho not only upheld the BVN framework as lawful but issued an injunction barring future legal challenges to NIBSS’s role, unless overturned on appeal.
“This judgment is a judgment in rem, binding on all parties and non-parties alike,” the judge said, making clear that his ruling has universal applicability in Nigerian jurisprudence unless set aside by a higher court.
He further held that the BVN, being a security-linked, verification-based system, does not constitute a breach of privacy. The judge emphasized that citizens voluntarily provide their biometrics as part of a nationwide effort to secure banking transactions and curb illicit financial flows.
Why This Matters
The ruling is significant not only for NIBSS and CBN but for Nigeria’s entire financial ecosystem. The BVN — a unique identifier issued to all bank customers — is now central to account verification, fraud prevention, and financial intelligence in Nigeria. Each BVN is linked to all of an individual’s accounts across banks and has become a cornerstone of KYC (Know Your Customer) compliance.
With this judgment, the court has essentially shielded NIBSS and the CBN from legal bottlenecks that could threaten the continuity or legality of one of Nigeria’s most expansive digital identification systems.
The case also underscores growing tensions between digital rights advocates and government-backed institutions, as concerns about privacy, surveillance, and data protection continue to surface in Nigeria’s evolving digital economy.
For NIBSS, the ruling eliminates uncertainty, granting it the judicial clarity it sought to operate freely without interference — an outcome that is likely to strengthen CBN-led regulatory oversight as the banking industry continues to digitize.
However, digital rights groups are expected to challenge the ruling at the Court of Appeal, setting the stage for what may be the next chapter in Nigeria’s ongoing battle over data governance and privacy in the digital age.