CBN directs banks to request indemnity from customers for transfers above N1m

The Central Bank of Nigeria (CBN) has ordered banks and Payment Service Providers to accept indemnity from customers for highly secured online funds transfers.

Indemnity means making compensation payments to one party by the other for any loss that occurs.

It stated this in a circular signed by the Director, Payments System Management Department, Musa Jimoh, with the reference number: PSM/DIR/PUB/CIR/01/006, titled ‘Circular on the review of operations of the NIBSS Instant Payments System and other electronic payment options with similar features,’ which was released on Thursday, 2 June 2022.

The circular stated that “Further to the circular on the above reference BSP/DIR/GEN/CIR/01/011 and dated August 13, 2014, banks are hereby required to comply with the following:

“Accept indemnity from customers for highly secured online funds transfer above N1m for individual and N10m for corporate, subject to a maximum of N25m (individual) and N250m (corporate).

“Provide customers with the option of electronic or paper indemnity based on the customer’s preference.

“Implement electronic indemnity with stricter controls requiring biometric verification of identity.

“Adhere to multiple-factor authentication for highly secured online funds transfer.