What you should know about the CBN Regulation of Instant (Inter-Bank) Electronic Funds Transfer Services in Nigeria

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In September 2018 the CBN set rules and regulations for the efficient operation of Instant Electronic Funds Transfer, effective from 2nd October 2018. Do you know what to do when things go wrong while using the electronic payment system? How do you recall funds you mistakenly sent to a wrong account? How long should electronic transfer take? How long should a reversal of a failed ATM or POS transaction take? Let’s find out..

The CBN circular prescribed the rights and responsibilities of various stakeholders in the banking industry, we will provide key highlights from the regulation. An Instant Electronic Fund Transfer (EFT) service provider is obligated to develop and circulate user guides to educate and enlighten other stakeholders on its Instant EFT services; Banks and Instant EFT services providers are to put in place a robust Dispute Resolution System (DRS) for users of its platform. How many banks truly have a Dispute Resolution System? There are backlogs of complaints from customers that have been swept under the carpet. Banks and financial institutions are expected to maintain a robust Anti-fraud management system approved by the CBN or connect to the CBN industry Anti-Fraud system. The Fraud desks are also mandated to provide fraud management returns to Nigeria Inter-bank Settlement System (NIBSS) on a daily basis which includes all instances of fraud and attempted fraud on its network. And notify customers at the point of onboarding, details of its operating hours and
service support contacts.

What are the key rights and responsibilities of Banks (SENDING ENTITY) to Customers?
A SENDING ENTITY is a bank or Financial Institution who initiates an Instant EFT on behalf of its customers.

1. Banks and financial institutions should refund into customer’s account full proceeds of failed transactions returned by the Receiving Entity within 10minutes;
2. Refund into customer’s account full proceeds of transaction which the
Sending Entity is unable to process within one (1) hour after the next
settlement closure;
3.Permit transfers from all its service delivery channels – branches, internet
banking, mobile banking, ATM/Kiosks, etc;
4. Publicize instant EFT services and the instant EFT FAQ to its customers;’
5. Receive customer complaints regarding EFT problems, and pursue
a resolution to a logical conclusion, in line with the dispute resolution system;
6. Provide Funds Transfer receipt to the customer as transaction evidence;
7.comply with the approved Anti-Money Laundering/Combating
Financing of Terrorism (AML/CFT) directive, and transaction value limits


What are the rights and responsibilities of a Receiving Entity ( Nigerian company or Financial Institution )?
A receiving entity is a Nigerian company or Financial Institution who receives the proceeds of Instant EFT on behalf of its customer.

1. apply Instant EFT proceeds to the customer’s account within 60
seconds;
2. where it is impracticable for the Receiving Entity to credit the customer’s account within 60 seconds, due to security, system or other
considerations, the Receiving Entity shall notify the Sending Entity,
beneficiary and/or the EFT service provider(s) shall be notified of the
issue with the assurance that pending credits will be applied as soon as
the issue is resolved but not exceeding 24 hours;

3. Provide in the transaction status notification, service support contacts a customer can report to in case of misapplication of credit to a wrong
account;
4. upon receipt from a customer of a notification of an erroneous credit
and necessary reversal authorization, the Receiving Entity shall reverse
the erroneous credit;
5. process all inward instant debit transactions, subject to valid debit
mandates;
6.publicize instant EFT services and the instant EFT FAQ to its customers;

What are your rights and responsibilities as a customer?
1. Provide accurate beneficiary account details for every Electronic fund transfer (EFT) instruction.
2. Report problems arising from EFT transactions promptly to the
Sending/Receiving Entity.
3. Whenever a credit has been erroneously applied to the customer’s
account with the Receiving Entity, the customer shall promptly notify the
Receiving Entity and authorize the reversal of such erroneous credit.
4. Where the customer account is unfunded, the customer shall provide
funds within 24 hours, failure to provide funds shall be a ground for
watch-listing of the customer in the banking industry, Credit Bureau and
reporting to law enforcement agencies.

 

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