The Central Bank of Nigeria has ordered banks and payment service providers to accept compensation from customers for highly secure online funds transfers.

He stated this in a circular signed by the director of the payment system management department, Musa Jimoh, with the reference number: PSM/DIR/PUB/CIR/01/006, entitled “Circular on the review of NIBSS instant payment system operations and other electronic payment options with similar functionality,” which was released on Thursday.

The circular specifies that “Following the circular bearing the above reference BSP/DIR/GEN/CIR/01/011 and dated August 13, 2014, banks are required to comply with the following:

“Accept Customer Compensation for Highly Secure Online Money Transfers over N1 million for individuals and N10 million for businesses, subject to a maximum of N25 million (individual) and N250 million naira (company).

“Offer customers the option of electronic or paper-based compensation based on customer preference.

“Implement e-compensation with tighter controls requiring biometric identity verification.

“Adhere to multi-factor authentication for a highly secure online funds transfer.

“Inform and educate customers on the use of compensation to increase transaction limits where possible.”

The CBN has also issued another guideline titled “Guidelines for the Registration and Operation of Cash Neutral Banking Hubs in Nigeria”.

It stated in the guidelines that BNCHs are fundraising centers to be established by registered (licensed) processing companies or depository banks depending on the needs of the business.

The CBN said the hubs would be located in areas with a high volume of commercial activity and cash transactions.

He further stated that the hubs would provide a platform for customers to make cash deposits and receive value regardless of which bank their account is domiciled with.

“This guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision,” the CBN said.

According to the CBN, the main purpose of establishing the BNCH was to reduce the risks and costs borne by banks, traders and large cash handlers in carrying out cash management activities; deepen financial inclusion and leverage shared services to improve cash management efficiency.

The CBN said the functions of the BNCH include receiving naira-denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash; disbursement of naira-denominated withdrawals on behalf of financial institutions to individuals and businesses with large volumes of cash, and any other activity that may be authorized by the apex bank.

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