Pursuant to the provision of Section 44 (2)(a) of the Act, which provided for the rate deduction, all banks, other financial institutions, mobile money operators, and payment service providers are required to implement the new provision of the Act as directed. The circular is addressed to all commercial, merchant, non-interest, and payment service banks, other financial institutions, mobile money operators, and payment service providers. It is jointly signed by CBN Director, Payments System Management Department, Chibuzo Efobi, and Director, Financial Policy and Regulation Department, Haruna Mustafa. The funds deducted from the levy are to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA). The CBN clarified that the levy shall be applied at the point of transactions, and the deducted amount shall be reflected in the customer’s account with the narration: “Cybersecurity Levy”. All financial institutions are required to begin the deductions within two weeks from the date of the circular, and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.
The apex bank also directed that system reconfigurations towards ensuring complete and timely submission of remittance files to the Nigeria Interbank Settlement System shall be completed within four weeks of the circular for commercial, merchant, non-interest, and payment service banks and mobile money operators. Other financial institutions, including microfinance banks, primary mortgage banks, and development finance institutions, will be required to effect the completion within eight weeks of the circular.
However, the circular exempts some transactions from the cybercrime levy. These include loan disbursements and repayments; salary payments; intra-account transfers within the same bank or between different banks for the same customer; intra-bank transfers between customers of the same bank, and other financial institutions (OFIs) instructions to their correspondent banks. Exemption also applies to interbank placements; banks’ transfers to CBN and vice versa; inter-branch transfers within a bank, cheques clearing and settlements; and Letters of Credits (LCs). Others include banks’ recapitalization related funding only bulk funds movement from collection accounts; savings and deposits, including transactions involving long-term investments such as treasury bills, bonds, and commercial papers; government social welfare programs transactions, e.g., pension payments; non-profit and charitable transactions, including donations to registered non-profit organizations or charities; educational institutions transactions, including tuition payments, and other transactions involving schools, universities, or other educational institutions.
Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts are also exempted from the levy. The central bank warned that Section 44 (8) of the Act prescribes that failure to remit the levy constitutes an offense liable on conviction to a fine of not less than two per cent of the annual turnover of the defaulting business, among others. All institutions under the regulatory purview of the CBN are directed to note and comply with the provisions of the Act and the circular.