CBN To Eliminate Payment Risks, Issues Framework To Banks, Others

The Central Bank Of Nigeria (CBN) has released its Risk and Information Security Management Framework to guide payment service providers and users of payment systems in Nigeria in other to reduce risks associated with payments in the  country.

According to the CBN, the framework will identify and address sources of systematic risks within the Nigerian payment system adding that it will employ necessary resources to achieve the objective.

The apex bank further said the framework is expected to address risks which are: systemic risks; credit risk; liquidity risk; operational risk; compliance, legal and regulatory risk; settlement risk and information security risk.

CBN further stated that the framework would include “any payment system based or operated in Nigeria that engages in the settlement of non-Naira transactions operating within Nigeria and those that operate across the Nigerian borders (cross border payment systems); along with their infrastructure providers and the Payment Service Providers (PSPs) that make up these systems.”

Transactions Not Covered

The guide only applies to cashless transactions as the CBN says does not apply to movement of physical cash, adding that it does not apply to systems for settling securities.

Also, the CBN listed market infrastructure like “trading exchange, trade-execution facilities, and multilateral trade-compression system; bilateral payments, clearing or settlement relationships, where a payment is not involved between financial institution and their customers,” as among the transactions which the frame work does not apply.

The CBN went on to emphasize that the risk across the National Payment System (NPS) rest within it, adding that it will drive the overall NPS strategy.

According to CBN, it will “provide risk oversight of the payments system and ensure adequate resources are allocated to risk management activities.

“Approve the risk strategy for the payments system.

“Set risk parameters and tolerances within which payment system activities

would be conducted.

“Determine and periodically review payments system key policies and Processes.

“Review payments system risk reports and direct remedial and / or mitigating actions as appropriate.”