Central Bank Of Nigeria Threatens To Sanction Banks On ATM Frauds

CBN threatens to implement sanctions on banks over the rising number of frauds via ATMs.

A circular "Need to install anti-skimming device at all ATM terminals" was sent to the banks by the Central Bank of Nigeria, which stated the increase in the number of Nigerians using ATM's as one of the e-payment channels. Therefore, the CBN commited to deploying and managing the ATMs in line with global best practices.
Mr. Dipo Fatokun, Director, Banking and Payment System department, noted that: “However, we have observed with dismay, an upward increase in the number of ATMs related fraud in the banking system. The development does not portend good for the industry and requires urgent steps to curb the abuse.

“Consequently, in addition to the existing guidelines on card related frauds and in order to guard against card skimming at ATM channels across the country, all deposit money banks (DMBs) are hereby mandated to comply with the provisions of section 3.2 ‘ATM Operations’ and 3.4 ‘ATM security’ of the Standards and Guidelines on ATM operations in Nigeria and also install risk mitigating devices on their ATM terminals on or before June 1st, 2014. The CBN would invoke appropriate sanctions for non compliance with this circular, ” he added.

According to the apex bank, as there is an increased interest and increased usage of ATMs, there is a definite increase in number of frauds via them. Therefore, banks are urged to install technologies to prevent this.

The apex bank released the recommended quideline on e-payments of salaries, taxes, pensions and suppliers in Nigeria, noting that it will be enforced in January, 2014. This  was done as an attempt to speed up the adoption of e-payments.

According to the guidelines, the deposit money banks are to perform operations concerning payment of taxes, salaries, pensions and suppliers via electronic payment and collection platform by organisations with over 50 employees. Payment instructions are no longer to be transmitted to the DMBs, deposit money banks, by private sector and all public organisations via unsecure channels like paper-based mandates, compact disks, e-mail attachments and flash drives.

The guideline noted that, the main objective that lies in e-payments of pensions, suppliers, taxes and salaries fully corresponds to the objective of NPSV, National Payment Systems Vision, 2020 to ensure the access and availability of safe and effective mechanisms for performing all types of payments from any locations at any times via multiple channels.

E-payments minimize the time and cost required to perform any transaction, and anti-skimming device will help to minimise leakages in revenue receipts of the Government and provide trustworthy audit trails, ensuring that the Nigerian payments system complies with global payments standards.