In order to transition to the new payment system, the Central Bank of Nigeria has ordered banks and payment service providers to separate all transactions that would normally be considered bulk payments.
The policy, according to a circular issued by the CBN on Wednesday, is aimed at simplifying seamless audits and increasing transparency in the banking system.
The circular, dated September 9 and signed by Musa Jimoh, Director, Payments System Management Department, was sent to all banks and PSPs.
The statement, titled ‘Disaggregation of bulk payments’, said, “The Central Bank of Nigeria has noticed the inherent problems associated with the processing of bulk transfers by banks and payment service providers.
“Currently, originating banks and PSPs pass a single debit entry through 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 banks”.
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Banks and payment system providers were urged to ensure full compliance with the directive and other payment system regulations by the apex bank.
Recall that, The Central Bank of Nigeria documented an N378.5bn gap in loan repayment by Anchor Borrowers program participants during six years, according to data gathered from the apex bank’s findings.
Between November 2015, when the ABP scheme started, and November 2020, the CBN completed 2.3 million projects and disbursed N497.2 billion to farmers through the program.
However, according to data from the CBN’s Fourth Quarter 2020 Economic report, just N118.7 billion was reimbursed by beneficiaries during the review period.
On November 17, 2015, the President, Major General Muhammadu Buhari (retd. ), announced the ABP to reverse Nigeria’s negative food balance of payments.
Farmers that grow grains (rice, maize, wheat, etc.), cotton, roots and tubers, sugarcane, tree crops, legumes, tomato, and animals will benefit from this initiative.