CBN Mandates Banks to Implement 0.5% Cybersecurity Levy on Transactions

The Central Bank of Nigeria (CBN) has instructed deposit money banks and other financial institutions in the country to levy a 0.5% cybersecurity charge on transactions, according to a circular dated May 6, 2024.

The circular, addressed to commercial banks, merchant banks, non-interest banks, payment service providers, and mobile money operators, outlines the directive in compliance with the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024.

Under the provision of Section 44 (2) (a) of the Act, the levy of 0.5% on all electronic transactions’ value is to be remitted to the National Cybersecurity Fund (NCF), administered by the Office of the National Security Adviser (ONSA).

Implementation of the levy is set to commence two weeks from the circular’s issuance date. It will be applied at the origin of electronic transfer, with the deducted amount reflected in the customer’s account under the narration ‘Cybersecurity Levy.’

Financial institutions are required to remit the collected levies in bulk to the NCF account domiciled at the CBN by the fifth business day of each subsequent month.

Transactions exempted from the levy include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and others outlined in the circular.

The CBN’s recent directives, including the cybersecurity levy and the stamp duty charge on mortgage-backed loans and bonds, indicate the regulator’s efforts to strengthen financial oversight and cybersecurity measures in the country.