Nigerian Banks To Charge 0.5% Cybersecurity Levy

The Central Bank of Nigeria (CBN) has instructed banks and financial institutions to impose a 0.5 per cent cybersecurity levy on electronic transfers as part of efforts to combat cyber threats and enhance the security of online transactions.

The directive contained in a circular signed by CBN officials Chibuzor Efobi, Director of Payments System Management and Haruna Mustafa, Director of Financial Policy and Regulation on Monday was issued to commercial, merchant, non-interest and payment service banks, as well as mobile money operators.

CBN said the policy would take effect in two weeks and charges would be described as ‘Cybersecurity Levy’.

“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% (0.005) equivalent to a half percent 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 (NCF), which shall be administered by the Office of the National Security Adviser (ONSA),” CBN said.

All banks, financial institutions, and payment service providers must implement the levy at the origin of electronic transfers. The deducted amount should be clearly shown in customers’ accounts with the designation ‘Cybersecurity Levy.’

Certain transactions like loan disbursements, salary payments, and inter-bank transfers are exempt from the levy to support essential financial operations. Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, ⁠Letters of Credits, ⁠Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings and deposits including transactions involving long-term investments, among others.

The CBN, in recent times, has been making an effort to sanitise the financial sector. It recently issued a directive which barred fintech’s from onboarding new customers. The fintech’s have in turn warned their customers against engaging in crypto transactions on their platforms.

The CBN’s initiative aligns with its commitment to fortify cybersecurity in the financial sector, fostering trust and resilience against cyber risks.

As the financial sector adapts to these regulatory changes, collaboration among stakeholders will be crucial in mitigating cybersecurity risks and promoting a safe digital environment for all users. By prioritizing cybersecurity measures, Nigeria’s financial industry can enhance trust, innovation, and resilience in the face of evolving cyber threats.