Nigeria’s apex bank, the Central Bank of Nigeria has issued a new directive mandating bank customers to pay indemnity on bank transfers above N1 million for individuals and N10 million for corporate organizations.
The CBN pegged an upper limit on the amount transferable at N25 million and N250 million for individuals and corporate customers respectively.
CBN offloads risks and liabilities on customers
Vanguard reports that the new directive is to absolve the banks and put liabilities for any breach or risks arising from such transfers on the bank customers.
CBN stated on Thursday, May 2, 2022, in a circular issued to banks on the Review of operations of the Nigerian Interbank Settlement System (NIBSS) Instant Payments System and other e-payment options with the same features. The circular conveying the directive was signed by the Director of Payments System Management Department, Musa Jimoh.
The circular said: [I]“Further to the Circular on the above subject referenced BPS/DIR/GEN/CIR/01/011 and dated August 13, 2014, banks are hereby required to comply with the following:
“Accept indemnity from customers for ‘Highly Secured Online Funds Transfer above N1 million for individual and N10 million for corporate, subject to a maximum of N25 million (Individual) and N250 million (Corporate);
“Provide customers with the option of electronic or paper indemnity based on the customer’s preference; Implement electronic indemnity with stricter controls requiring biometric verification of identity;
“Adhere to multiple factor authentication (MFA) for ‘Highly Secured Online Funds Transfer; Inform and educate customers on the use of indemnity to increase transaction limits where applicable.”
1. The Central Bank of Nigeria has issued a new directive to banks asking them to charge indemnity on transfers above N 1 million for individuals and N10 million for corporate bodies
2. The new rule also pegged a higher limit on transfers above N200 million for individuals and N250 million for corporate organisations
3. The order is meant to insulate the banks from any loss or risks associated with the transactions and place the liability on the customers