The Central Bank of Nigeria has mandated that banks in the country will soon apply a cybersecurity levy to transactions.
According to a circular released on Monday, this levy will take effect in two weeks.
The circular, addressed to all commercial, merchant, non-interest, and payment service banks, among others, follows up on previous communications dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023).
These communications emphasized compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.
Additionally, the recent public discussions led by the Office of the National Security Adviser on this matter were referenced in the circular.
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 per cent (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 which shall be administered by the Office of the National Security Adviser.
The CBN said that all banks, other financial institutions and payment service providers are now required to implement the directive, saying, “The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy’.
“Deductions shall commence within two 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 fifth business day of every subsequent month.”
Certain transactions are exempt from the cybersecurity levy, including loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank.
Additionally, exemptions apply to inter-branch transfers within a bank, cheque clearing and settlements, Letters of Credit, banks’ recapitalization-related funding (only bulk fund movements from collection accounts), savings and deposits, and transactions involving long-term investments, among others.
The Central Bank of Nigeria (CBN) has been actively working to reform the financial sector. Recently, it issued a directive prohibiting fintechs from onboarding new customers.
Fintechs, in response, have cautioned their customers against engaging in cryptocurrency transactions on their platforms.
This development follows closely after the Federal Government’s directive for Deposit Money Banks to immediately implement a 0.375% stamp duty charge on all mortgage-backed loans and bonds.
