CBN slam banks N2.5m fine for reoccurring e-payment infractions
The Central Bank of Nigeria, CBN, has introduced a penalty of N2.5million on Deposit Money Banks on every repeated occurrence of specific infractions and termination of the use of the unapproved end-to-end e-payment solution.
Under the new regulation, other financial institutions that fail to ensure that 3rd party end-to-end e-payment solution used by them is approved by CBN will also be slammed a N1million penalty.
The penalties are contained in its new regulation on the end-to-end electronic payment of salaries, pensions and other remittances, suppliers and revenue collections in Nigeria.
CBN, in its regulation on, ‘Exposure draft for the regulation on end-to-end electronic payment of salaries, pensions and other remittances, suppliers and revenue collections in Nigeria, revised 2018’ also introduced other fines for other forms of infractions.
For instance, financial institutions that impose constraints to hinder electronic payment into beneficiary’s accounts contrary to approved regulations, will be fined N1000 for each transaction not processed on a bank approved e-payment platform due to constraints imposed by a DMB or payment scheme. Similarly, any transaction not consummated within the timelines prescribed by the bank will also attract N1000 fine.
It said the objective of the end-to-end electronic payment of salaries, pensions, suppliers and taxes initiative was fully aligned with the core objectives of the National Payment Systems Vision 2020, which was 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.
The apex bank noted that this would reduce the time and costs of transactions, minimise leakages in revenue receipts and at the same time provide reliable audit trails, thereby making the Nigerian payments system align with international best practices.
“This regulation, therefore, is set out to provide all stakeholders with the operational procedures and regulations that guide end-to-end electronic payment, as defined in section 6.0(i) of this regulation, of all forms of salaries, pensions, suppliers and taxes in Nigeria including levies, social payments, penalties, recovery, bills, honorarium etc.”
It described the end-to-end electronic payment as, “the seamless electronic processing and payment of all forms of salaries, pensions, suppliers and taxes with the electronic delivery of associated schedules alongside the payment transactions, where applicable on a bank approved electronic platform which transmits the instruction to debit a payer’s account and credit a beneficiary’s bank account.”