The Central Bank of Nigeria (CBN) has withdrawn the circular directing banks and other financial institutions to implement the 0.5 per cent cyber security levy.
The withdrawal of the circular was announced via a statement signed by Haruna Mustafa, Director, Financial Policy and Regulation Department, and Chibuzo Efobi, Director, Payment System Management Department.
The terse two-paragraph circular read: “The Central Bank of Nigeria circular dated May 6, 2024 (Ref. PSMD/DIR/PUB/LAB/017/004) on the above subject. ‘
“Further to this, please be advised that the above referenced circular is hereby withdrawn.”
President Bola Tinubu last week ordered the CBN to suspend the implementation of the controversial cybersecurity levy policy after outcry by Nigerians.
This followed the decision of the House of Representatives, which asked the CBN to withdraw its circular directing all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions in the country.
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The CBN on May 6, 2024, issued a circular mandating all banks, mobile money operators, and payment service providers to implement a new cybersecurity levy, following the provisions laid out in the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.
According to the Act, a levy amounting to 0.5 per cent of the value of all electronic transactions will be collected and remitted to the National Cybersecurity Fund, overseen by the Office of the National Security Adviser.
Financial institutions are required to apply the levy at the point of electronic transfer origination.
The deducted amount is to be explicitly noted in customer accounts under the descriptor “Cybersecurity Levy” and remitted by the financial institution. All financial institutions are required to start implementing the levy within two weeks from the issuance of the circular.
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By implication, the deduction of the levy by financial institutions should commence on May 20, 2024.
However, financial institutions are to make their remittances in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.
The circular also stipulates a timeframe for financial institutions to reconfigure their systems to ensure complete and timely submission of remittance files to the Nigeria Interbank Settlement Systems Plc as follows: “Commercial, Merchant, Non-Interest, and Payment Service Banks – Within four weeks of the issuance of the Circular.
“All other Financial Institutions (Microfinance Banks, Primary Mortgage Banks, Development Financial Institutions) – Within eight weeks of the issuance of the Circular,” the circular noted.
The CBN emphasised strict adherence to the mandate, warning that any financial institution that fails to comply with the provisions will face severe penalties. As outlined in the Act, non-compliant entities are subject to a minimum fine of two per cent of their annual turnover upon conviction.