CBN ORDER BANKS TO CHARGE 0.5% CYBERSECURITY LEVY

The Central Bank of Nigeria has ordered all financial institutions in Nigeria to initiate a 0.5% cybersecurity levy on every transaction. This information was obtained from the circular released by the CBN on Monday, May 6, 2024, stating banks will implement the new financial policy in the next two weeks.

The circular revealed the policy was a follow-up to 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.

The cybercrime policy applies to every financial institution, and payment service providers, including fintech companies, are required to implement the directive. 

The CBN said, “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.”

However, a few exemptions from the cybersecurity levy include salary payment, loan disbursements, and repayment, intra-account transfers within the same bank or between different banks for the same customer, interbank placement, intra-account transfers within the same bank or between different banks for the same customer, 

Financial institutions’ instructions are given to their correspondent banks, and banks’Banks transfers are made to CBN and vice versa.

The levy is a responsive effort by the CBN to sanitize the financial sector, which has cut across its recent barrels on fintech from onboarding new customers. In response, all fintech companies issued a directive to all their users against engaging in cryptocurrency with the platform.

The cybersecurity levy came a week after the Federal Government directed Deposit Money Banks to immediately initiate the deduction of a 0.375 percent stamp duty charge on all mortgaged-backed loans and bonds.