By Andy Nssien
The Central Bank of Nigeria (CBN) has taken steps to facilitate the development of efficient and effective electronic payments system in the country.
Towards this end, the apex regulatory bank has issued the regulations for the operation of indirect participants in the payments system.
Under the guidelines addressed to all deposit money banks and other financial institutions, the indirect participants may be involved in any of the following payments; cheque clearing, EFT bulk payments, instant payments,. card issuance, card transaction acquiring (ATM, POS, Web,etc.), portals (e-reference, anti-fraud, e-signatory, e-passport, etc.), bank verification number System, and any other component approved by the CBN.
The regulation signed by the director, Payments System Management Department, Sam C. Okojere becomes effective November 11, 2019.
To qualify as an indirect participant, an institution shall have a satisfactory risk-based rating from the CBN and secure a letter of recommendation from its direct participating bank, signed by the Chief Risk Officer and an Executive Director of the direct participating bank; and comply with the NUBAN (Nigeria Uniform Bank Account Number) Standards.
According to the CBN, only direct participating banks are permitted to settle payment obligations of indirect participants. An indirect participant shall settle all its payments obligations through only one direct participating bank per payment scheme at any given time.
In addition to other provisions, the guideline stated that where the account of an indirect participant with a direct participating bank is not adequately funded, the direct participating bank may decline further settlement services to the indirect participant and inform the payment processor accordingly
