CBN Directs Banks to Implement Cybersecurity Levy on Electronic Transactions

The Central Bank of Nigeria (CBN) has issued a directive to all commercial banks and financial institutions to commence the deduction of a cybersecurity levy on electronic transactions. This levy, which amounts to 0.5% of the value of all electronic transfers, is in line with the provisions of the 2024 Cybercrime (Prohibition, Prevention, etc) Amendment Act.

According to the circular released by the CBN, the cybersecurity levy will be channeled to the National Cyber Security Fund, to be administered by the office of the National Security Adviser (NSA). The Act specifies that 0.5% of the value of electronic transactions will be deducted and remitted to the Fund.

The circular, signed by Chibuzor Efobi and Haruna Mustafa, directed that the levy be applied at the point of transfer origination. However, the CBN provided a list of 16 exempted transactions including loan disbursements, salary payments, and government social welfare programs transactions.

The implementation of this levy is a follow-up to letters issued by the CBN in 2018, emphasizing compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015. Banks are required to remit the collected levies in bulk to the National Cyber Security Fund account at the CBN on the 5th business day of each subsequent month.

Failure to comply with the provisions of the Act and the circular may result in penalties for businesses, including fines amounting to not less than 2% of their turnover annually. In addition to the cybersecurity levy, the CBN has also reinstated the 2% processing fees for large cash deposits in banks, effective May 1, 2024.