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Account tiers which was introduced by The Central Bank of Nigeria, creates a system that enables mobile money operators and bank agents identify specific requirements and limitations of different account types and how they can handle transactions using these accounts.

“Tier” means level. Account tiering is a policy introduced by the CBN to create different account levels. Each account level will have its specific requirements to be opened, and limits of the type of transactions that can be performed through that account.

The Starting point for any person to access financial services is to open an account. Research has shown that one of the reasons a lot of people are not part of the financial ecosystem is because of the cumbersome account opening requirements/procedures. There is a basic minimum identification requirement for any Nigerian to be able to open a bank account - one being having a formal means of identification (National Passport, Drivers License or Voters ID). However, many people (especially lower income earners, poor and socially disadvantaged segment of the population, majority of who live in the rural areas) lack these formal means of identification. For those that even attempt to get these IDs, they find that the procedures to acquire them are too cumbersome and expensive, effectively out of their financial means. This makes financial services go beyond the reach of this category of people - excluding them from the various financial services they would have had access to, if they had a bank account, and indirectly promotes the informal sector It became clear that to continue to maintain the same KYC requirements for all segments of the population, encouraged the prevalence of informal financial systems which in turn undermines the financial inclusion objectives. To solve this challenge, the CBN adopted a system of tiered accounts, reducing the requirement for account opening for those who cannot  meet the original full KYC requirements.

As agents, you need to understand these tiers of accounts as this will inform the kind of accounts you will be opening for your potential customers - depending on how well they can meet the KYC requirements.

Here are the characteristics of the Tier one Accounts:  

  • Transaction Restrictions: Transactions in tier one accounts are  limited to a maximum single deposit amount of N30,000 and a maximum cumulative of N300,000 at any point in time. This means that a tier 1 account holder cannot receive any deposit into his/her account larger than N30,000 per time, and the maximum balance a tier 1 account holder can have at any time is N300,000.
  • Where to open Tier one account: This is the type of account that can be opened by mobile money agents. You can also open a tier one account at the bank. If a customer wants to upgrade his/her tier one account, they will have to go to the bank.
 
 
  • Customer Identification Requirements for opening a Tier one account: Passport Photograph, Name, place of birth, date of birth, Gender, address, Telephone number, etc. BVN No. not required.
 

Here are the characteristics of the Tier two accounts:

  • Transaction restrictions: Transactions in tier two accounts are  limited to a maximum single deposit of N50,000 and a maximum cumulative balance of N400,000 are allowed at any time.  This means that a tier 2 account holder cannot receive any deposit into his/her account larger than N50,000 per time, and the maximum balance a tier 2 account holder can have at any time is N400,000.
  • Where to open Tier two account: You can only open a tier two account at the bank. If a customer wants to upgrade his/her tier two account, they will have to go to the bank.
  • Customer Identification Requirements for opening a Tier two account: Evidence of basic customer information (such as passport photograph, name, place and date of birth, gender, address, etc) is required. BVN No. not required.

Here are the characteristics of the Tier three accounts:  

  • Transaction Threshold: There is no limit placed on single deposit or cumulative balance for tier 3 accounts. They can bank through all available channels -  Internet or App Banking, only USSD Transfer, in-bank or agent transactions.
  • Where to open Tier three account: You can only open a tier three account at the bank.
  • Customer Identification Requirements for opening a Tier three account: Customers are required to comply with the KYC requirements contained in CBN regulations. BVN No. is required.
 
     

If you want to get more insight about the different tiers of accounts, feel free to download and check out this CBN circular.

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