BoU orders Banks to Start Accepting NINs Instead of Issuing Card Numbers to Borrowers

Bank of Uganda (BoU) has directed financial institutions to start accepting a National Identification Number (NIN) when taking records of borrowers and ordered financial institutions to phase out Financial Card Numbers.

In a letter to Chief Executive Officers (CEOs) of Supervised Financial Institutions (SFIs) and Credit Reference Bureaus (CRBs), BoU’s Executive Director of Supervision Tumubweine Twinemanzi noted that Section 66 of the Registration of Person’s Act, 2015 stipulates that one must present either a NIN or AIN to open a bank account or make a credit transaction.

However, he went on, applying for credit requires a borrower to have a Financial Card Number issued by the lending financial institution.

Twinemanzi noted that this is limiting access to financial services and delaying inclusion.

“Whereas Bank of Uganda (BOU) circular Ref.EDS.123.3A ‘CRB – Additional Rejection Rules’ dated May 11, 2011, requires Participating Institutions (PIs) to supply a Financial Card Number for all Credit Applications (CAP) and Credit Borrower Account (CBA) records, the Financial Card Number limits access to financial services to a large proportion of the population,” reads the letter.

“To promote financial inclusion and broaden credit information sharing, Bank of Uganda is with immediate effect revoking the above circular.”

SFIs and CRBs have been directed to begin transitioning from Financial Card Numbers to NINs as the mandatory identifier for Ugandan citizens.

The transition will be conducted in a phased manner, with new individual Credit Applications (CAPs) of Ugandan citizens taking immediate effect. That is, applicants must be supply to the CRBs with a NIN as a mandatory identifier.

The central bank also ordered financial institutions to supply all credit records of non-Ugandans to the CRBs with a combination of either a Refugee Number, a Passport Number, or a Work Permit Number.

The above documents will be used until the National Identification Regulatory Authority (NIRA) starts issuing Alien Identification Numbers (AINs).

All individual Credit Borrower Account (CBA) records will be supplied with a NIN or other unique identifier effective from January 1, 2023.

According to the letter, starting December 1, all loans to Non-Individual Borrowers or corporate entities licensed to conduct business in Uganda will be reported to the CRBs with a unique registration number issued by the relevant registration authority in accordance with the laws of Uganda.