CBN’s New Cybersecurity Levy Exempts 16 Banking Transactions

The Central Bank of Nigeria (CBN) has introduced a 0.5% cybersecurity fee on electronic transactions, effective from May 6, 2024.

However, this levy does not apply to certain banking transactions, as outlined in a recent circular obtained by PUNCH Online.

The circular, signed by Chibuzo Efobi and Haruna Mustafa, Directors of the Payments System Management Department and Financial Policy and Regulation Department respectively, specifies that the levy must be applied at the point of origination of an electronic transfer. Financial institutions are required to deduct and remit the amount, which will be reflected in customers’ accounts with the narration, ‘Cybersecurity Levy.’

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While the levy encompasses most electronic transactions, there are 16 banking transactions exempted from this fee. These include:

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 Programmes transactions e.g., Pension payments
14. Non-profit and charitable transactions, including donations to registered non-profit organizations or charities
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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This exemption aims to mitigate the financial burden on certain transactions while ensuring robust cybersecurity measures across electronic banking channels. As the CBN implements this levy, stakeholders will monitor its impact on the banking sector and consumer behavior.