Court backs NIBSS’ right to manage BVN database

A federal high court in Abuja has ruled that the Nigeria Inter-Bank Settlement System (NIBSS) has the legal right to manage the country’s bank verification number (BVN) database.

Justice James Omotosho delivered the judgment on Friday, declaring that NIBSS operations comply with the Central Bank of Nigeria (CBN) Act and other relevant financial laws.

The case arose after NIBSS, represented by senior advocate Wolemi Esan, took legal action to confirm its authority over the BVN system. The company sued the Incorporated Trustees of Digital Rights Lawyers Initiative, the CBN, and the Attorney General of the Federation.

NIBSS wanted the court to declare that its management of BVN data does not violate Nigerians’ constitutional right to privacy or break any existing laws. The company also sought a permanent court order preventing anyone, including the Digital Rights Lawyers Initiative, from challenging its role.

The bank settlement system argued that it has the power to develop and regulate nationwide infrastructure for electronic payments and fund transfers, which includes the BVN system.

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NIBSS accused the Digital Rights Lawyers Initiative of repeatedly filing lawsuits, either directly or through other parties, challenging its authority and claiming it violates privacy rights.

The CBN supported NIBSS’s position through its counsel, Kofo Abdulsalam-Alada, who filed documents stating that NIBSS’s role in managing the BVN database is lawful, constitutionally approved, and essential for financial security and system stability.

The CBN’s lawyer cited Section 47(2) of the CBN Act (2007) and provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 to confirm the central bank’s authority to establish and regulate payment systems.

In his ruling, Justice Omotosho found that the BVN initiative does not violate privacy rights and confirmed NIBSS’s authority to maintain the system.

He noted that the CBN’s regulatory powers are well-established in BOFIA 2020 and other relevant laws.

“NIBSS has the power to manage the BVN. The court grants the reliefs of NIBSS as prayed,” the judge ruled.

The judge also issued a permanent injunction stopping the Digital Rights Lawyers Initiative and any other parties from challenging NIBSS’s management of the BVN system.

Justice Omotosho concluded that the judgment is a “judgment in rem,” meaning it’s binding on all persons and entities unless overturned on appeal.

A judgment in rem is a court ruling that applies to everyone, rather than just the parties involved in the lawsuit.