What to know about CBN’s directive to banks to deduct from customers’ e-transfers in Nigeria
The Central Bank of Nigeria (CBN) has directed banks in the country to implement a 0.5 percent cybersecurity levy on electronic transfers.
In a circular signed by Chibuzor Efobi, Director of Payments System Management, and Haruna Mustafa, Director of Financial Policy and Regulation, the apex bank disclosed that the implementation of the levy would start in two weeks time.
The circular was directed to all commercial, merchant, non-interest and payment service banks, among others.
The circular revealed that it was a follow-up on an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), respectively, on compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.
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According to CBN, the deduction and collection of the cybersecurity levy is a sequel to the enactment of the 2024 Cybercrime (prohibition, prevention etc) Amendment Act of 2024.
“Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act,
“a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the second schedule of the Act, is to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA).
“Deductions shall commence within two (2) weeks from the date of this circular for all financial institutions and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the 5th business day of every subsequent month.
“Finally, all institutions under the regulatory purview of the CBN are hereby directed to note and comply with the provisions of the Act and this circular.”
Exempted from the levy are loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank.
Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, Letters of Credits, Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings and deposits including transactions involving long-term investments, among others.
Things to know about the new cybersecurity levy
Here are some things to know about the cybersecurity levy to be paid by Nigerians, according to the CBN circular:
- A new levy of 0.5%, equivalent to half per cent, is applied to electronic transactions as mandated by the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024.
- The levy is paid by the originator of the electronic transaction and deducted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration: “Cybersecurity Levy.”
- Financial institutions will deduct the levy and remit it to the National Cybersecurity Fund administered by the Office of the National Security Adviser.
- Deductions shall commence within two weeks from the date of the circular, May 6, and financial institutions must remit collected levies in bulk to the NCF account domiciled at the CBN monthly by the fifth business day of the following month.
- Financial institutions have deadlines to update their systems to handle levy deduction and remittance. Failure to remit the levy can result in penalties, including a fine of up to 2% of a financial institution’s annual turnover.
