Banks And Fintechs To charge 0.5% Cybersecurity Levy: Full List of Banks Exempted

The Central Bank of Nigeria (CBN) has mandated a new cybersecurity levy. This levy, set at 0.5%, will be charged on all electronic transactions processed by banks and fintech companies. The initiative is aimed at strengthening the cybersecurity infrastructure to protect against the increasing threat of cyber-attacks.

The levy will be automatically applied to each electronic transaction at the point of origination. It will be the responsibility of the financial instittions to deduct this levy and remit it accordingly. Customers will see this deduction reflected in their account statements, with a clear indication that it is for the ‘Cybersecurity Levy’.

The directive was announced on May 6, 2024, and banks, as well as fintech companies, are expected to fully comply within a two-week period. The CBN has outlined that certain transactions will be exempt from this levy, including loan disbursements and repayments, salary payments, and transfers within the same account.

Non-compliance with this directive will attract severe penalties. Financial institutions that fail to adhere to the levy implementation will face a fine amounting to no less than 2% of their annual turnover. This move underscores the CBN’s commitment to ensuring the safety and integrity of the financial sector’s digital transactions.

The Central Bank of Nigeria (CBN) has exempted certain transactions from the new 0.5% cybersecurity levy. Here’s a summary of the 16 types of banking transactions that are not subject to this levy:

1. Loan disbursements and repayments - Transactions related to loans will not incur the levy.
2. Salary payments - Salaries paid through banks are exempt.
3. Intra-account transfers - Transfers within the same account or between different accounts of the same customer.
4. Intra-bank transfers - Transfers between customers of the same bank.
5. Other Financial Institutions instructions - Instructions to correspondent banks from other financial institutions.
6. Interbank placements - Transactions between banks.
7. Banks’ transfers to CBN and vice-versa - Movements of funds between banks and the CBN.
8. Inter-branch transfers - Transfers within the same bank but between different branches.
9. Cheque clearing and settlements - Transactions involving cheque clearances.
10. Letters of Credit - Transactions involving letters of credit.
11. Banks’ recapitalisation-related funding - Only bulk funds movement from collection accounts.
12. Savings and deposits - Transactions involving savings and long-term investments like Treasury Bills, Bonds, and Commercial Papers.
13. Government Social Welfare Programmes - Transactions like pension payments.
14. Non-profit and charitable transactions - Donations to registered non-profits or charities.
15. Educational institutions’ transactions - Payments related to schools, universities, or other educational institutions.
16. 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.