FULL LIST: 16 BANKING TRANSACTIONS EXEMPTED FROM NEW CBN’S CYBERSECURITY LEVY
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The Central Bank of Nigeria (CBN), in a circular dated May 6, 2024, has ordered all banks to start charging a 0.5 per cent cybersecurity levy on all electronic transactions within the country excluding 16 listed banking deals.
According to a circular signed by the Director, Payments System Management Department, Chibuzo Efobi; and the Director, Financial Policy and Regulation Department, Haruna Mustafa; the cybersecurity would commence two weeks from May 6, 2024.
The apex bank, in the circular, directed to all commercial, merchant, non-interest, and payment service banks, among others; to start the implementation of the cybersecurity charges after two weeks of the information.
However, some transactions are exempted from this directive on new bank charges to be paid by Nigerians. Here’s a list of transactions exempted by the CBN:
1. Loan disbursements and repayments
This exemption applies to the movement of funds related to loans. It won’t be charged on the money you receive as a loan or when you make repayments towards your loan.
2. Salary payments
This ensures there’s no additional levy on your salary when it’s electronically deposited into your account.
3. Intra-account transfers
This category covers transfers within your own account, even if it’s done between accounts you hold at different banks but under the same name. Essentially, moving money between your own accounts won’t incur the levy.
4. Intra-bank transfers between customers of the same bank
Electronic transfers between accounts held by different people within the same bank are also exempted. So, sending money to a friend who also banks with the same institution won’t be levied.
5. Other Financial Institutions (OFIs) instructions to their correspondent banks
This applies to transactions initiated by non-bank financial institutions (like payment processors) when they send instructions to banks they work with (correspondent banks).
6. Interbank placements
Exemption in this regards refers to short-term transfers of funds between banks, which is a normal part of their daily operations. These placements are exempt from the levy.
7. Banks’ transfers to CBN and vice-versa
Any transfers between commercial banks and the Central Bank of Nigeria are covered under this exemption. These transactions are essential for managing the country’s financial system and are not subject to the levy.
8. Inter-branch transfers within a bank
Electronic transfers happening between branches of the same bank won’t attract cybersecurity levy. That is; moving money between your accounts in different branches won’t be charged with the levy.
9. Cheques clearing and settlements
The clearing and settlement process ensures proper transfer of funds when cheques are used. Since this is an internal banking process to finalize cheque transactions, it’s exempted from the levy.
10. Letters of Credit (LCs)
Letters of Credit are trade finance instruments used to guarantee payments. Transactions related to Letters of Credit are exempt from the cybersecurity levy.
11. Banks’ recapitalization related funding
This exemption applies to bulk transfers of funds related to banks increasing their capital base (recapitalization). Only the movement of these large funds from collection accounts is exempt, not everyday transactions.
12. Savings and deposits including long-term investments
Deposits you make into your savings account and transactions related to long-term investments like Treasury Bills, Bonds, and Commercial Papers are also exempted from the cybersecurity levy.
13. Government Social Welfare Programs
This ensures there’s no levy on transactions related to government social programs, such as depositing your pension payments.
14. Non-profit and charitable transactions
Donations made electronically to registered non-profit organizations or charities are exempt from the cybersecurity levy.
15. Educational Institutions transactions
This covers electronic transactions involving educational institutions, such as tuition payments made to schools, universities, or other accredited institutions.
16. Transactions involving bank’s internal accounts
This applies to various internal transfers banks make to manage their accounts. These include suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
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