Credit risk management, Cyber Security Act 2015: CBN to monitor banks’ compliance

The Central Bank of Nigeria (CBN) has announced that it will soon commence monthly inspection of banks to ascertain their level of compliance with regulatory guidelines on the redesigned Credit Risk Management System (CRMS).

The apex banking sector regulator, also in a separate circular to all banks, mandates the payment of a levy of 0.005 per cent into the National Cyber Security Fund Account in the Central Bank of Nigeria.

It noted that pursuant to the provisions of Section 44 (S.1 and 2) of the Cybercrime [Prohibition, Prevention, etc.], Act 2015, which established the fund, a National Cyber Security Fund account has been opened and domiciled in the Central Bank of Nigeria.

In a circular to all banks posted on its website, the banking watchdog noted that its earlier circular on the redesigned CRMS issued in February last year had required lenders’ chief financial officers (CFOs) to: “ensure that total loans/advances/credits reported on FiNA or any regulatory platform for such submissions of returns must match total value of credit/exposures reported in the CRMS (including the distribution of exposures by ‘Business Lines’).”

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Besides, the regulator said it: “Shall commence conduct of monthly compliance status checks of each bank’s CRMS returns to verify compliance with this requirement.”

Additionally, the regulator also pointed out  that since banks must complete their routine end-of-month processes in order to generate balances required to correctly update the outstanding balance of each live CRMS record, there was need to align this CRMS compliance status check with its circular dated April, 10, 2014, on the ‘Timelines for Rendiåtion of Statutory Returns through the FiNA Application to the CBN and NDIC.’

Also, the circular on cyber crime observed that all banks are hereby directed to comply with the statutory provision for the collection and remittance of the 0.005per cent levy on all electronic transactions by the businesses specified in the second schedule of the Cybercrime (Prohibition, Prevention, etc.) Act, as follows: GSM Service Providers and all telecommunication companies; Internet Service Providers; Banks and Other Financial Institutions;  Insurance Companies; and Nigerian Stock Exchange.

“All levies imposed under the Act should be remitted to the CBN within a period of 30 days after collection.  This directive takes immediate effect,” CBN stated.