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New Regulatory Frameworks To Govern Electronic Payments & Collections And Issuance Of Bankers Acceptances & Commercial Papers In Nigeria

The Central Bank of Nigeria (“CBN”) is the apex regulator of Nigeria’s monetary and financial sectors and has statutory powers to issue regulations for the administration of the financial market and promotion of a sound financial system in Nigeria[1]. Recently, the CBN issued regulations in respect of two separate frameworks for governing operations of key stakeholders in the Nigerian Payments System and the Nigerian Financial System, respectively.

The first framework, issued on September 10, 2019, is titled: Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria (the “Regulation”); and is a revision of the “Guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria”, which was issued by the CBN in 2014. It provides all stakeholders with the operational procedures for end-to-end electronic payments and collections in Nigeria.

The second framework followed hot on the heels of the first. Thus, on September 11, 2019, the CBN issued the Guidelines on the Issuance and Treatment of Bankers Acceptances and Commercial Papers (the “Guidelines”). The Guidelines set uniform procedures for the issuance of Bankers Acceptances (“BAs”) and Commercial Papers (“CPs”) in Nigeria, in order to ensure that they are correctly treated by banks and discount houses. 

This article reviews the Regulation and the Guidelines (which both became operational immediately after they were issued) and provides a synopsis of the key provisions of each of them.   

  1. Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria


    The Regulation appears to be an offshoot of the CBN’s goal to fully align with the core objectives of the National Payments System Vision 2020 (PSV2020), which in effect, is to ensure availability of safe, effective and efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple electronic channels. This way, significant reduction in the time and costs of transactions is expected to be achieved and leakages in revenue receipts minimized. Furthermore, implementation of the Regulation is expected to aid the provision of reliable audit trails which will ensure that the Nigerian Payments System aligns with international best practices. 


    The Regulation applies to all CBN regulated Stakeholders and mandates the adoption, implementation and compliance with the directives on End-to-End Electronic Payments of all forms of salaries, pensions & other remittances, suppliers and revenue collections (including but not limited to taxes, levies, penalties, recoveries, assessments, and the disbursement of funds for social programs payments bills, honorarium, scholarships, allowances) both in the public and private sectors of the economy. The Regulation also applies to, and defines the roles of, Other Stakeholders in electronic payments and collections.

    According to the Regulation, End-to-End Electronic Payment refers to the seamless electronic processing of all forms of salaries, pensions and other remittances, suppliers and revenue collections on a CBN approved electronic platform which transmits the instruction to debit a payer’s account and credit a beneficiary’s account or any other electronic channels without depending on any third party, manual or semi-manual means. 

    The Regulation also refers to CBN regulated Stakeholders as all financial institutions, Payments Service Providers and other entities licensed and regulated by the CBN; including Deposit Money Banks (“DMBs”), Other Financial Institutions (“OFIs”), Mobile Money Operators (“MMOs”) and Payment Service Solutions Providers (“PSSPs”)”. Similarly, the Regulation describes Other Stakeholders as all other players in the electronic payments and collections market which are not regulated by the CBN.


    Under the Regulation, the roles of the CBN, CBN regulated Stakeholders, and that of Other Stakeholders are clearly spelt out.

    • The main role of the CBN is to promote the adoption of end-to-end electronic payment by all stakeholders. To this end, the CBN shall license, regulate and supervise the operations of the end-to-end electronic payment solution, systems and service providers. The CBN is also expected to create and maintain a platform that will allow for constant interactions and engagements among the stakeholders while collaborating with other statutory and regulatory agencies for the effective implementation of the Regulation. In addition to the foregoing, the CBN is expected to maintain a help desk for the purposes of carrying out public enlightenment, receiving complaints and monitoring prompt resolution of the complaints while also adjudicating in cases of disputes among the stakeholders. 

    • DMBs, OFIs and MMOs are to provide payers and beneficiaries with appropriate accounts with DMBs, OFIs or any other approved channel for receiving payments (such as mobile money/electronic wallet), subject to the CBN’s approved Know-Your-Customer (“KYC”) limits. Furthermore, they are to process electronic payment instructions in accordance with subsisting payments system and clearing system rules. In carrying out the foregoing roles, they are to maintain customer service contact centers where enquiries and challenges can be promptly attended to within stipulated timelines. Also, in the event of duplicated or excess payments, they are to establish a recovery process in line with appropriate CBN regulation. Whilst filing their mandatory monthly returns with the CBN, these key players are required to provide a set of transaction data, as may be specified, relating to salary, pension and tax payment.

1 See section 57, Banks and Other Financial Institutions Act, Cap. B3, Laws of the Federation of Nigeria 2004 and section 32(1), Central Bank of Nigeria Act, 2007.