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CBN Mandates Banks to Implement 0.5% Cybersecurity Levy on Transactions

May 7, 2024

Move Aimed at Strengthening National Cybersecurity Infrastructure….

 

In a bid to fortify Nigeria’s cybersecurity framework, the Central Bank of Nigeria (CBN) has instructed all banks operating within the country to impose a cybersecurity levy on electronic transactions. The directive, outlined in a circular released on Monday, mandates financial institutions to commence the implementation of the levy within two weeks.

The decision stems from previous correspondences dated June 25, 2018, and October 5, 2018, urging compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015. Additionally, recent engagements by the Office of the National Security Adviser have underscored the urgency of bolstering cybersecurity measures.

Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024, the levy, set at 0.5 per cent (0.005) of all electronic transaction values, is designated to be remitted to the National Cybersecurity Fund. This fund will be overseen by the Office of the National Security Adviser, facilitating the enhancement of cybersecurity infrastructure across the nation.

According to the directive, the levy will be applied at the point of electronic transfer origination and subsequently deducted by financial institutions, with a clear narration of “Cybersecurity Levy” in customers’ account statements. Commencing within two weeks, the levies collected will be remitted monthly to the National Cybersecurity Fund account domiciled at the CBN by the fifth business day of each subsequent month.

However, certain transactions are exempted from this levy, including loan disbursements and repayments, salary payments, and specified inter-bank transfers. The exemption list aims to ensure that essential financial activities remain unaffected by the levy imposition.

This move by the CBN aligns with its ongoing efforts to enhance regulatory oversight within the financial sector. Recent directives, such as the prohibition of new customer onboarding by fintech companies, demonstrate a broader agenda to strengthen financial regulations and safeguard against emerging risks.

The introduction of the cybersecurity levy coincides closely with the Federal Government’s directive for Deposit Money Banks to enforce a stamp duty charge on mortgage-backed loans and bonds. Together, these measures signify a concerted effort to promote fiscal responsibility and security within Nigeria’s financial ecosystem.

 

Credit: Punch

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