CBN Threatens Banks Over e-Payment Violations

The Central Bank of Nigeria (CBN) has threatened to sanction chief executives of Deposit Money Banks (DMBs) that violate existing e-payment reporting rules in the country.

The sanction will also extend to breaches by banks that use unapproved third party end-to-end payment solution in their daily operations.

According to the apex bank, banks’ chiefs who flout the guidelines will henceforth receive a warning letter with a N2 million fine imposed on the erring financial institution.

The stipulated penalty regime is contained in the recently released CBN’s approved guideline on end-to-end electronic payment of salaries, pensions, suppliers and taxes.

The new regime maintains that the CBN must approve all third party payment solution being deployed by commercial banks.

Also, the guidelines encourage the banks to promote the adoption of end-to-end electronic payments by all stakeholders covered by the existing regulation.

On electronic payments and collections for public and private sector, the CBN said in the event of duplicated/excess payment not noticed but withdrawn by the beneficiary, the beneficiary shall make funds available for refund to the payer.

Furthermore, it warned that bank customers who receive duplicate or excess payments into their accounts but fail to refund to the bank will have their Bank Verification Number (BVN) placed on CBN’s watchlist.

Similarly, bank employees and pensioners are to maintain appropriate bank accounts with banks, Other Financial Institutions or any other approved channel for receiving payments such as mobile money/electronic wallet, subject to the CBN’s approved Know Your Customer limits.

Other measures include providing valid account and contact details to the Payer; reporting cases of non-payment, delayed payment or wrong payment of salaries/contributory pension remittances carried out on a CBN approved e-payment platform, to the Payer; registering and maintaining a Retirement Savings Account (RSA) with a licensed Pension Fund Administrator (PFA).

In exercise of its powers under the CBN Act, 2007, the apex bank’s new guidelines fully align with the core objectives of the National Payments System Vision 2020 (PSV2020) to ensure the availability of safe, effective and efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple electronic channels.

It said the measures aim to  reduce the time and costs of transactions, minimise leakages in revenue receipts and at the same time provide reliable audit trails, thereby ensuring that the Nigerian Payments System (NPS) aligns with international best practices.

The CBN also said banks, other financial institutions and mobile money operators must promote the adoption of end-to-end electronic payments by all stakeholders covered by the new regulation.

In addition, the e-payment operators are expected to deploy end-to-end electronic payment of salaries for employee staff strength of 20 and above; maintain appropriate account with banks or other financial institutions and  adopt a CBN approved end-to-end electronic payment platform and use for all forms of payment and collections.