Why CBN want Bank customers to Link their Social Media to their Bank Accounts, Court Okays

Why CBN want Bank customers to Link their Social Media to their Bank Accounts, Court Okays

The Lagos Federal High Court has upheld a regulation by the Central Bank of Nigeria (CBN) requiring financial institutions to get the social media handles of their customers as part of the standard know-your-customer procedure.

Nnamdi Dimgba, the presiding judge, said it would be unreasonable to hold the regulation against the apex bank as an attempt to breach the privacy of customers. He said that social media handles are communication channels like emails and phone numbers and may be necessary for financial institutions to determine if they should do business with a potential customer.

On this basis, Dimgba struck out the lawsuit filed by Chris Eke, a Lagos-based lawyer, seeking that the court declare that Section 6(a)(iv) of the Central Bank of Nigeria (Customer Due Diligence) Regulations 2023 is undemocratic, unconstitutional, null and void.

Eke had said that the regulation was inconsistent with Section 37 of the 1999 Constitution of the Federal Republic of Nigeria (as amended). He asked the court to grant an order restraining the CBN from mandating financial institutions to include social media handles in their applications while opening an account. In response, the CBN called the competence of the suit into question, citing that it does not violate any customer’s privacy.

The court ruled that the basis for the CBN’s objection had merit and struck out the suit against the bank. The presiding judge further stated that the CBN had directed the regulation to financial institutions, and not individual applicants. He argued that the applicant could choose not to do business with any financial institutions if the regulation inconvenienced him.

“The said regulations are directed to and apply to financial institutions. It does not apply to private individuals, such as the applicant. Even if, as appears to be argued, that the regulations itself [sic] would inevitably affect the applicant, this claim is speculative for the simple reason that nowhere in the affidavit in support was it stated that the applicant operates an account with a financial institution and that the said institution had demanded his social media handle,” the judge said.

“So the suggestion that he would be affected by this regulation, albeit negatively, is very speculative and at large. Secondly, there is also no deposition to the effect that any financial institution had begun to implement this regulation and that its implementation had begun to create disruptions and inconvenience against the general population, in which case one could infer that the suit should be legitimated as a public interest litigation.”

“Thirdly, assuming even that the banks had begun to implement these regulations, the applicant assuming he maintained any bank accounts or sought to open one, but is being hindered or irritated by the requirement of the regulation to avail his social media handle as part of KYC, the applicant still had a choice, which is to refuse to do business with any bank insisting on the information as part of its social media handle but to seek other alternatives.”

“Fourthly, and for all it is worth, I do not see how asking a banking or potential banking customer to provide his social media handle can ever amount to a breach of privacy. Granted that Section 37 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) provides inter alia: “The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected.”

“My view is that the provision of a social media handle is of the same genre as the provision of email address, phone numbers and other means by which a potential customer of a bank can be contacted.

“Thus, it is clear from the face of the regulations as set out above that email addresses, phone numbers and social media handles are all provided for under clause 6(iv) just to show that the aim was not to pry on anyone but rather to provide alternative ways by which a customer of the bank can be contacted, and or due diligence conducted on the person to determine if the person is a fit and proper person to extend banking services to.”

“I do not see how this infringes on the right to privacy.  I should even say that the essence of having a social media account was for one to be publicly visible communication-wise. It, therefore, appears quite ironic, though wryly, that one can suggest that asking for information about a social media handle with which the individual exposes and immerses himself or herself in the public can amount to a violation of privacy rights, which rights itself [sic] is all about isolation of one from public glare.

“It is also to my knowledge that even in filling some business applications, personal information of this sort is sometimes requested, and parties generally oblige. If it does not constitute a breach of privacy, why should it now?

“A social media handle is left at large for the world to see, being in the public space, everyone enjoys the liberty to have access to it whether or not consent was obtained. It would be highly unreasonable to hold the respondent in breach of privacy for what other persons have access to.

“The apprehension of the applicant of his social interactions being monitored is manifestly speculative in itself and rather incredulous to believe that the financial institutions have the luxury of time to concern itself with such frivolities.

“On the whole, if I did not sustain the NPO, I would have dismissed the suit for the reasons stated.  But the NPO having been sustained, the suit is therefore hereby struck out. I make no order as to costs”.

In June, the CBN ordered financial institutions to obtain the social media handles of their customers for identification. In July, the House of Representatives ordered the CBN to halt the implementation of this regulation on the basis that it might be unnecessary and might be putting pressure on Nigerians.