BY EDMOND ODOK – Determined to enhance audit trail and transparency in banking transactions, the Central Bank of Nigeria (CBN) has directed banks and Payment Service Providers (PSPs) to process end-to-end bulk payments or transfers on their platforms and retain breakdown of all accounts receiving credits in the custody of the sender’s bank.
The apex bank is piqued that the current system operated by banks and other payment providers has regrettably aided opacity and difficulties tracking funds movement within the nation’s financial sector.
In a circular to the banks and the PSPs titled; “Disaggregation of Bulk Payments”, the CBN noted that the bulk payment structure currently adopted by banks and other payment providers is clearly obstructing transparency and audit trail in the system.
The current bulk payment arrangement has the originating bank or PSP passing a single debit entry through the initiating customer’s account and multiple credits to the beneficiary’s account.
Signed by its Director, Payments System Management Department, Musa Jimoh, the CBN’s circular said the directive became necessary given inherent challenges associated with processing bulk transfers by banks and PSPs such as distortion of audit trail and transparency.
According to the circular; “The CBN has noticed the inherent problems associated with the processing of bulk transfers by banks and payment service providers (PSPs).
“Currently, originating banks and PSPs pass a single debit entry through the initiating customer’s account and multiple credits to beneficiaries without adequate records of the credit entries in their system. This distorts the audit trail and hampers transparency.
“In order to address this challenge, the CBN hereby directs that all end-to-end bulk payments or transfers shall henceforth be processed on the platforms of banks or PSPs for their customers with a detailed breakdown of the accounts that receive the credits retained in the custody of the sender’s bank.”
The circular maintained that; “All banks and PSPs are required to ensure full compliance with this requirement and all other payment system regulations.”
