The Central Bank of Nigeria (CBN) has directed deposit money banks (DMBs) providing bank guarantees to Nigeria Bulk Electricity Trading (NBET) Plc and the Transmission Company of Nigeria (TCN) on behalf of the electricity distribution companies (Discos) to take over electricity bill collections from customers.
Similarly, the apex bank also charged the DMBs to ensure the remittances of Discos’ payments to both NBET and TCN.
The directive which becomes enforceable with immediate effect, was contained in a letter addressed to all banks, dated August 21, 2020 and signed by the Director of Banking Supervision, CBN, Mr. Bello Hassan.
In the circular titled, ‘DMB-led Electricity Market Collections,’ the apex bank stated that the directive was in line with a directive of the Power Sector Coordination Working Group to improve payment discipline in the Nigerian Electricity Supply Industry (NESI) as well as improve the quality of electricity generation, transmission and distribution nationwide.
Based on the latest directive, the apex bank stated that no bank should open or continue to maintain a collection account for a Disco without the express no-objection of the bank that guaranteed the power company’s exposure to NBET or TCN.
This is even as it ordered that the payment or settlement of all NESI-related goods or services shall be made through the banking system.
The CBN directed that all energy and non-energy collections of Discos, whether cash or cashless, should only be performed by the banks.
It clarified: “Consequently, all collections for the payments of NESI regulated goods and services provided by a Disco shall be paid into a designated account such that: collections arising from services rendered by the Disco shall be paid into an account in the sole name of the Disco and collections arising from services rendered by a third party/parties on behalf of the Disco shall be paid into an account in the joint name of the Disco and the third- party vendor(s).”
“No entity shall be permitted to collect revenues for Discos except if that entity is so authorised by a DMB in line with the relevant CBN guidelines for agent banking and agent banking relationships, therefore: the DMB shall be permitted to authorise its agents to collect energy and non- energy payments on its behalf for any Disco; the actions or inactions of the agent shall be the responsibility of the authorising DMB and any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any Disco without appropriate authorisation shall have regulatory sanctions imposed on it,” the apex bank added.
