The Central Bank of Nigeria, CBN, has directed banks and Payment Service Providers , PSPs, to commence processing of end-to-end bulk payments or transfers on their platforms and retain breakdown of the accounts that receive the credits in the custody of the sender’s bank.
In a circular to the banks and the PSPs yesterday titled: “Disaggregation of Bulk Payments”, the apex bank said the bulk payment system currently in operation at banks and other payment providers hampers transparency and audit trail.
In the current bulk payment system, the originating bank or PSP passes a single debit entry through the initiating customer’s account and multiple credits to the beneficiary’s account.
The circular signed by Director, Payments System Management Department, CBN, Musa Jimoh, stated that the CBN gave the directive because it noticed the inherent problems associated with the processing of bulk transfers by banks and PSPs which include distorting audit trail and transparency.
CBN said; “The CBN has noticed the inherent problems associated with the processing of bulk transfers by banks and payment service providers (PSPs).
“Currently, originating banks and PSPs pass a single debit entry through the initiating customer’s account and multiple credits to beneficiaries without adequate records of the credit entries in their system. This distorts the audit trail and hampers transparency.
“In order to address this challenge, the CBN hereby directs that all end-to-end bulk payments or transfers shall henceforth be processed on the platforms of banks or PSPs for their customers with a detailed breakdown of the accounts that receive the credits retained in the custody of the sender’s bank. “All banks and PSPs are required to ensure full compliance with this requirement and all other payment system regulations.”
By Elizabeth Adegbesan
The Vanguard Newspaper September 9th, 2021