CBN orders cybersecurity levy deductions on electronic transfers

Central Bank of Nigeria (CBN) on Monday, ordered banks operating in the country to start charging a cybersecurity levy on transactions.

A circular issued by the apex bank said the deductions would become effective from the next two weeks.

The circular, which was issued by the Director of Payment Services, Mr Uzoma Efobi, was addressed to all commercial banks and payments services operators in the country.

The circular revealed that it was a follow-up on an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), respectively, on compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.

It noted that “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act, is to be remitted to the National Cybersecurity Fund which shall be administered by the Office of the National Security Adviser.”

Also, CBN stressed that “The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy’.”

Accordingly, all banks, Other Financial Institutions and Payments Service Providers are required to implement the new provision of the Act as directed.

The central bank noted that the levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.

Exemption also applies to interbank placements; banks’ transfers to CBN and vice-versa; inter-branch transfers within a bank, cheques clearing and settlements; and Letters of Credits (LCs).