16 Transactions Exempt from CBN’s New 0.5% Cybersecurity Levy

The Central Bank of Nigeria (CBN) has announced a new 0.5% levy on all electronic transactions to fund cybersecurity initiatives. However, 16 specific banking transactions will be exempt from this levy.

The levy will be applied starting two weeks from May 6, 2024, and will be deducted by financial institutions at the point of electronic transfer origination. The deducted amount will be reflected in the customer’s account with the narration “Cybersecurity Levy.”

Here’s a breakdown of the 16 transactions exempt from the levy:

Loan Disbursements and Repayments:

This ensures loan accessibility and repayment processes remain unaffected.

Salary Payments: Ensures employees continue to receive salaries electronically without additional deductions.

Intra-account Transfers: Transfers within the same bank account or between accounts of the same customer across different banks are exempt.

Intra-Bank Customer Transfers:

Transactions between customers within the same bank will not be subject to the levy.

Other Financial Institutions’ Instructions: Instructions sent by other financial institutions to their correspondent banks are not included.

Interbank Placements: Liquidity management between banks remains unaffected.

Banks’ Transfers to CBN and Vice Versa: Official transfers between banks and the central bank are exempt.

Inter-Branch Transfers: Transfers within a bank’s branch network are not subject to the levy.

Cheque Clearing and Settlements: Traditional cheque processing remains unaffected.

Letters of Credit: Trade finance instruments like Letters of Credit are exempt.

Banks’ Recapitalization Funding: Bulk fund movements related to bank recapitalization efforts are not included.

Savings and Deposits: Deposits and savings activities, including investments like Treasury Bills and Bonds, are exempt.

Government Social Welfare Programs: Transactions related to government social programs like pension payments won’t be levied.

Non-Profit and Charitable Transactions: Donations to registered non-profit organizations and charities are exempt.

Educational Institutions’ Transactions: Payments related to tuition and other educational activities are not subject to the levy.

Internal Bank Account Transactions: Activities within a bank’s internal accounts, such as suspense accounts, clearing accounts, and escrow accounts, are exempt.

This exemption list aims to minimize the impact on essential financial activities and vulnerable groups. The CBN’s move to strengthen cybersecurity while potentially increasing revenue for these initiatives comes with considerations for various stakeholders within the Nigerian financial system.