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Implementation of CBN Cybersecurity Levy To Kick Off, with the Exclusion of 16 Banks

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By Uche Amunike

The Apex Bank of Nigeria has given directives that all banks should start the implementation of a 0.5% CBN cybersecurity levy on every electronic transaction made within the country, with the exception of 16 listed banking deals.

This was disclosed in a circular signed by the Director, Payment System Management Department, Chibuzo Efobi and the Director, Financial Policy and Regulation Department, Haruna Mustafa. The CBN cybersecurity levy will take affect two weeks from May 6, 2024.

According to the CBN, commercial, merchant, non-interest and payment service banks, among others, are to start the implementation of the levy two weeks after the information given in the circular.

It also stated: ‘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.’

According to the circular, it is important to know that 0.5% is equivalent to 0.005, which is half of one percent. 0.005 is the decimal representation of 0.5%. This simply means that the CBN will remove 0.5% of any transfer made in accordance with the stipulated guidelines.

For example, if a customer intends to transfer N10,000 the new directive stipulates that the customer’s CBN cybersecurity levy will be N50. This is different from bank charges or any other charges incurred on bank transactions like VAT, etc.

‘The levy shall be applied at the point of electronic transfer origination, them deducted and remitted by the financial institution. Did the doctor amount shall be reflected in the customers account with the narration, ‘Cybersecurity Levy’, the circular further stated.

The total of 16 banks have, however, been excluded from the new CBN cyber Security levy. The exempted transactions are as stated below:

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 instructions to their correspondent banks

6. Interbank placements,

 

7. Banks’ transfers to CBN and vice-versa

 

8. Inter-branch transfers within a bank

 

9. Cheque clearing and settlements

10. Letters of Credits

 

11. Banks’ recapitalization-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 Programs transactions e.g. Pension payments

 

14. Non-profit and charitable transactions, including donations to registered non-profit organizations or charities

15. 15. Educational institutions’ transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions

 

16. Transactions involving 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.

 

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