Commercial banks and other financial institutions in Nigeria have been directed to implement a 0.5 per cent cybersecurity levy on electronic transfers.
The Central Bank of Nigeria (CBN), in a circular signed by Chibuzor Efobi, director of payments system management and Haruna Mustafa, director of financial policy and regulation, issued to the commercial, merchant, non-interest and payment service banks, as well as mobile money operators, said the policy would take effect in two weeks, and charges would be described as ‘Cybersecurity Levy’.
According to the apex bank, the deduction and collection of the cybersecurity levy is a sequel to the enactment of the 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 per cent 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),” CBN said.
CBN said the charges would be remitted to the national cyber security fund, which the office of the NSA would administer.“
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.”
CBN said failure to remit the levy is an offence which attracts a fine of not less than 2 per cent of the annual turnover of the defaulting business, amongst others.
“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.”
Earlier, banks announced the reintroduction of a 2 per cent charge on deposits above N500,000.
CBN exempts salary payments, loan disbursement, and 14 others from the newly introduced cybersecurity levy
Meanwhile, the Central Bank of Nigeria (CBN) has exempted some categories, which include salary payment loan disbursement from cybersecurity levy.
The following are exemptions from CBN’s cybersecurity levy:
1. Loan disbursements and repayments
2. Salary payments
3. Intra-account transfers within the same bank or between different banks for the same customer
4. Intra-bank transfers between customers of the same bank
5. Other financial institutions (OFIs) instructions to their correspondent banks
6. Interbank placements
7. Banks’ transfers to CBN and vice-versa
8. Inter-branch transfers within a bank
9. Cheques clearing and settlements
10. Letters of credits (LCs)
11. Banks recapitalisation-related funding only bulk funds movement from collection accounts
12. Savings and deposits, including transactions involving long-term investments such as treasury bills, bonds, and commercial papers.
13. Government social welfare programmes transactions, e.g. pension payments.
14. Non-profit and charitable transactions, including donations to registered non-profit organisations or charities.
15. Educational institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions.
16. Transactions involving the bank’s internal accounts, such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
Regarding penalties for noncompliance, the CBN said failure to remit the levy is an offence liable “on conviction to a fine of not less than 2 per cent of the annual turnover of the defaulting business, amongst others”.