A growing chorus of voices within Nigeria’s financial sector is calling on the Central Bank of Nigeria (CBN) to abolish the long-standing requirement for personal references when opening a current account, labeling the practice an archaic ritual that hinders modern banking and foreign investment.
The rule, a legacy of the Banks and Other Financial Institutions Act (BOFIA), originated in an era of paper records and limited verification tools, where a referee’s signature served as a primary safeguard against fraud. Today, analysts argue, this “analogue patch” has been rendered obsolete by Nigeria’s advanced digital identification infrastructure.
“The referee system is a regulatory souvenir rather than a meaningful safeguard,” stated a sector analysis published over the weekend. “In a world of shaky records and unreliable address checks, it served its purpose. That era is gone, and so is the justification.”
Modern systems like the Bank Verification Number (BVN), National Identification Number (NIN), SIM registration linked to identities, and the Corporate Affairs Commission’s digital portal provide banks with precise, biometric, and demographic data far superior to a handwritten endorsement. The rise of open banking further enables institutions to access verified transaction histories and cashflow patterns with customer consent, allowing for risk assessment based on real-time analytics.
The requirement now creates significant friction, particularly for Nigerians in the diaspora, foreign investors, and international companies seeking to operate locally. These groups often struggle to provide referees who are physically present, facing a procedural hurdle that does not exist in peer markets like the UK, US, Singapore, the UAE, or South Africa.
Digital banks in Nigeria have already demonstrated that efficient, secure onboarding is possible without personal references. They rely instead on BVN, NIN, geolocation, and transaction monitoring to manage risk—a method considered more effective than the paper-based tradition.
The CBN itself has championed the digital infrastructure that now makes the referee rule redundant. With the tools to verify identity, track financial behaviour, and perform automated fraud detection at scale, the call to modernize the account-opening process is seen as a logical next step in Nigeria’s push to expand financial access, attract capital, and fully embrace a digital banking ecosystem.
“As Nigeria works to welcome investment and enable diaspora participation, phasing out the reference requirement is both practical and overdue,” the analysis concluded. “The sector has evolved, and the technology has matured. It is time for regulation to catch up.”
