Salary payment, loan disbursements, 16 exemptions of cybersecurity levy

The Central Bank of Nigeria (CBN) on Monday directed banks to start the process of deducting a 0.5 per cent cybersecurity levy to be administered by the office of the National Security Adviser (NSA).

While the levy is to be charged on all electronic transactions and applied at the point of transfer origination, the CBN in an appendix to the circular, listed 16 transactions exempted from the levy. According to the banking regulator, these transactions include:

The new policy is expected to take effect in two weeks, according to a circular, jointly signed by Chibuzor Efobi, CBN’s director of payments system management, and Haruna Mustafa, director of financial policy and regulation.

For clarity, if you transfer N50,000, a 0.5 percent of the levy — which amounts to N250 — will be deducted from your account.

Similarly, if N100,000 is transferred, N500 will be deducted as the cybersecurity levy, while a transfer of N1 million will attract a levy of N5,000.

In addition, the CBN asked banks and all other financial institutions to do system reconfigurations towards ensuring complete and timely submission of remittance files to the Nigeria Interbank Settlement System (NIBSS) Plc.

READ ALSO: CBN directs banks to charge 0.5% cybersecurity levy on electronic transfer

The apex bank said commercial, merchant, non-interest and payment service banks, and mobile money operators are expected to reconfigure within four weeks of the circular.

The CBN also asked all other financial institutions such as microfinance banks, primary mortgage banks, and development finance institutions, to reconfigure within eight weeks of the circular.

The cybersecurity levy comes with some exemptions. According to the regulator, the exemptions include:

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Loan disbursements and repayments

Salary payments

Intra-account transfers within the same bank or between different banks for the same customer

Intra-bank transfers between customers of the same bank

Other financial institutions (OFIs) instructions to their correspondent banks

Interbank placements

Banks’ transfers to CBN and vice-versa

Inter-branch transfers within a bank

Cheques clearing and settlements

Letters of credits (LCs)

Banks recapitalisation related funding only bulk funds movement from collection accounts

Savings and deposits including transactions involving long-term investments such as treasury bills, bonds, and commercial papers.

Government social welfare programmes transactions e.g. pension payments.

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Non-profit and charitable transactions including donations to registered non-profit organisations or charities.

Educational institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions.

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.

Speaking on penalties for noncompliance, the CBN said failure to remit the levy is an offence liable “on conviction to a fine of not less than 2 percent of the annual turnover of the defaulting business, amongst others”.