The Central Bank of Nigeria (CBN) has announced a series of new sanctions that will be meted out to Deposit Money Banks (DMBs), Mobile Money Operators (MMO) and Other Financial Institutions (OFIs) for electronic payment infractions.
The series of new sanctions released by the apex bank was contained in the latest document obtained on the bank’s website and titled: ‘Regulations on Electronic Payments and Collections for Public and Private Sectors in Nigeria.’
The details: According to the CBN, the newly released regulation is a revision of the guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria (2014), and is intended to guide the end-to-end electronic payment of salaries, pensions and other remittances, suppliers and revenue collections in Nigeria.
The CBN stated that all DMBs, OFIs and Mobile Money Operators must:
- promote the adoption of end-to-end electronic payments by all stakeholders covered by this regulation;
- provide payers and beneficiaries with appropriate accounts with DMBs, OFIs or any other approved channel for receiving payments such as mobile money/electronic wallet, subject to the CBN’s approved KYC limits;
- process electronic payment instructions in accordance with subsisting payments system and clearing system rules;
- publish customer service/ contact centres details via multiple media channels and maintain customer service contact centres, to promptly attend to all electronic payment enquiries and challenges within stipulated timelines; and report of customer complaints, indicating resolution status;
- make available any or combination of the following data sets, as may be applicable, along with the mandatory returns to the CBN, on a monthly basis or as may be otherwise specified:
I. Number of salary/pension/supplier/tax-paying organisations
II. Salaries/pension/supplier/tax payment transactions count
III. Salaries/pension/supplier/tax payment transactions value per payment method given below;I. end-to-end; bank assist;
II. cheques; and
- in the event of duplicated/excess payments, establish a recovery process engaging both Payers and Beneficiaries in line with subsisting CBN.
According to the Central Bank, any DMB, OFI or MMO that fails to discharge the responsibilities as detailed above shall be penalised.
Compliance: Following the implementation of the Guideline on end-to-end electronic payment of salaries, pensions, suppliers and taxes by all public and private sector organisations, the CBN also instructed DMBs to dishonour payment instructions for all forms of salaries, pensions, suppliers and taxes not transmitted on a CBN approved straight-through electronic payment and collection platform issued by organisations with more than 20 employees.
This means payment instructions and associated schedules are no longer to be transmitted to DMBs through unsecured channels, such as paper-based mandates, flash drives, compact discs (CDs), email attachments, etc. by qualifying public and private sector organisations.
The sanctions: Among other sanctions, the CBN disclosed that failure to offer 3rd party e-payment solution to customers not approved by CBN now attracts a penalty of N2 million for DMB and N1 million for OFIs on every repeated occurrence.
- Transactions not consummated within the timelines prescribed in the relevant payment channel regulation or non-return of un-applied funds to payer’s account within 24 hours attract a penalty of N1,000 per transaction.
- Also, the non-provision of the quarterly report on end-to-end e–payment of salaries, pensions, suppliers & taxes to the CBN now attracts N5,000 penalty for each day for which report is not provided to the CBN or a penalty of N250,000 and a warning letter to the Managing Director.