The Federal High Court in Lagos has upheld a provision of the Central Bank of Nigeria’s (CBN) Customer Due Diligence Regulations 2023, mandating banks to collect and verify customers’ social media handles as part of the Know-Your-Customer process. Justice Nnamdi Dimgba, the Judge, expressed his view, stating, “I fail to see how requesting a banking or prospective banking customer to provide their social media handle could constitute a privacy breach.”
Following a lawsuit filed by Lagos-based lawyer Chris Eke against the CBN, challenging the constitutionality of the regulation requiring banks to collect social media handles, the court heard arguments. Eke argued that the regulation is undemocratic and unconstitutional, alleging a violation of the 1999 Constitution. He sought a perpetual injunction against the CBN’s enforcement of the regulation.
However, the CBN countered with a preliminary objection, asserting that the regulation does not infringe on privacy rights.
The 2023 CBN regulation, aimed at combating financial crimes and terrorism, also aims to bolster customer identification procedures. Section 6 (IV) mandates Nigerian financial institutions to gather and authenticate customers’ social media handles within the Know Your Customer (KYC) process, enhancing accuracy and depth of customer identification. Justice Dimgba dismissed the applicant’s argument, deeming claims of privacy violation ambitious. He clarified that the regulations pertain to financial institutions, not private individuals like the applicant.
Justice Dimgba noted the absence of evidence showing financial institutions implementing the regulation and causing public disruptions, which would have validated the lawsuit as a public interest case. However, individuals like the applicant may opt out of conducting business with banks requesting social media handles, citing the constitutional right to privacy (Section 37 of the Nigerian Constitution).
The judge emphasized that disclosing a social media handle is equivalent to sharing an email address, phone number, or other personal information. As a result, he dismissed the case.
However, the collection of social media handles also raises concerns about privacy and data security. Customers may feel apprehensive about sharing their online identities with financial institutions, fearing potential misuse or unauthorized access to their personal information.
