NIGERIA:CBN imposes N10m fine for use of unlicensed e-payment solutions

MARCH 13,2014.

VANGUARD.

The Central Bank of Nigeria (CBN) has said that banks that use unlicensed third party electronic payment solution will pay a fine of N10 million.

This was part of the regime of sanctions contained in the guidelines on electronic payment of salaries, pensions, suppliers and taxes in Nigeria.

The guidelines   spell out the roles and responsibilities, of all stakeholders in the end-to-end electronic payment of salaries, pensions, suppliers and taxes.

It also spells out sanctions and fines for sundry contraventions of the guidelines.  For example,  when  a bank uses an unlicensed 3rd party e-payment solution for end-to-end e-payment of salaries etc., the CBN would suspend its e-payment operations with the bank, issue a warning letter to the managing Director and impose a fine of  N10 million  for every repeated occurrence

Also, Non-availability of help desk/contact centre to receive enquiries, complaints and provide feedback on e-payment issues, will lead to suspension of the bank’s end-to-end e-payment operations until conditions are satisfied.

Non-Provision of monthly report on reported complaints & resolution status to the Bank attracts N25,000 penalty for each day for which report is not provided to the Bank, while submission of false or inaccurate reports  will attract  penalty of N250, 000 and a warning letter to the Managing Director.

The guidelines explained that, “to-End Electronic Payment is 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, mobile account, electronic wallet or any other electronic channels; and shall include the ability of a payer to independently monitor and obtain electronic feedback on the status of any payment, at any time without depending on any third party, manual or semi-manual means.

“This means payment instructions and associated schedules are no longer to be transmitted to deposit money banks (DMBs)  by all public and private sector organisations through unsecured channels, such as paper- based mandates, flash drives, compact discs (CD), email attachments , etc.

While nationwide commencement date of  end-to-end e-payment of salaries, pensions, suppliers and taxes is January 9, 2014, compliance monitoring and  enforcement  will be in stages. This is to give enough time to all stakeholders to make necessary adjustments as may be required. Compliance monitoring and enforcement by CBN shall be according to the schedule below.

According to the apex bank all salaries, pensions, suppliers and taxes should be through end-to-end electronic payment.

The guidelines stated that banks are expected to:  promote the adoption of end-to-end electronic payments by all stakeholders covered by the guidelines;  provide paying organisations and beneficiaries with e-payment enabled bank accounts or any other approved electronic channel that promotes financial inclusion; process electronic payment instructions in accordance with subsisting payments system and clearing house rules;  publish customer service contact details and maintain customer service desks in all branches, to promptly attend to all electronic payment enquiries and challenges within stipulated timelines; and   maintain and make available to the Bank, on a periodic basis, report of all electronic payment transactions processed and report of customer complaints, indicating resolution status.