CBN Orders NIBSS To Debit Banks For Fraudulent Transactions

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The Central Bank of Nigeria (CBN) has directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the settlement accounts of deposit money banks (DMBs) on fraud proceeds as part of its efforts to curb fraudulent transactions in the financial services sector,

According to the apex bank, if any DMB failed to detect a fraudulent transaction or failed to prove that it conducted due diligence in such transaction, it will be penalized by charges.

The directive, which takes immediate effect for implementation is designed to make the DMBs step up their fraud detection strategies by leverage the Know Your Customer (KYC) guidelines.

The NIBSS, which is owned by all licensed banks including the Central Bank of Nigeria, is the clearing house for banking system transactions, handling inter-bank payments in order to avoid potential bottlenecks associated with inter-bank funds transfer and settlement.

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