The Central Bank of Nigeria (CBN) has mandated all financial institutions to implement a 0.5% cybersecurity levy on all electronic transactions starting from May 6, 2024, to enhance the nation’s cyber defenses. According to a circular issued by CBN directors Chibuzo Efobi and Haruna Mustafa, this levy will be automatically deducted at the source of each transaction and will appear on customer statements as 'Cybersecurity Levy'. However, the CBN has identified several types of banking transactions that will be exempt from this charge to minimize the impact on essential financial activities.
The exemptions include all forms of loan disbursements and repayments, salary payments, and any transfers within the same account or between different accounts owned by the same customer. Also exempt are transfers between customers of the same bank, and instructions from Other Financial Institutions to their correspondent banks. The levy will not apply to interbank placements, nor to transfers between banks and the CBN itself.
Additionally, internal transfers within branches of the same bank, along with processes involved in cheque clearing and settlements, are exempt. The policy also spares transactions related to Letters of Credit and bulk fund movements linked to bank recapitalization. Traditional banking services such as deposits and savings, which include transactions involving treasury bills, bonds, and commercial papers, will also be free of this levy.
The exemption list extends to payments related to government social welfare programs such as pensions, as well as transactions conducted by non-profits and charities. Financial activities of educational institutions, including tuition payments, are likewise exempt. Lastly, internal bank transactions including those involving suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts will not be subjected to the cybersecurity levy.
These measures ensure that critical and routine financial operations continue without the additional financial burden, thereby supporting economic stability and facilitating continued charitable and educational endeavors.
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