The Central Bank of Nigeria has ordered banks and Payment Service Providers to accept indemnity from customers for highly secured online funds transfers.

It stated this in a circular signed by the Director, Payments System Management Department, Musa Jimoh, with the reference number: PSM/DIR/PUB/CIR/01/006, titled ‘Circular on the review of operations of the NIBSS Instant Payments System and other electronic payment options with similar features’, which was released on Thursday.

The circular stated that “Further to the circular on the above reference BSP/DIR/GEN/CIR/01/011 and dated August 13, 2014, banks are hereby required to comply with the following:

“Accept indemnity from customers for highly secured online funds transfer above N1m for individual and N10m for corporate, subject to a maximum of N25m (individual) and N250m (corporate).

“Provide customers with the option of electronic or paper indemnity based on the customer’s preference.

“Implement electronic indemnity with stricter controls requiring biometric verification of identify.

“Adhere to multiple factor authentication for highly secured online funds transfer.

“Inform and educate customers on the use of indemnity to increase transaction limits where possible.”

The CBN also released another guideline titled ‘Guidelines for the registration & operation of Bank Neutral Cash Hubs in Nigeria’.

It stated in the guidelines that BNCHs were cash collection centers to be established by registered (licensed) processing companies or Deposit Money Banks based on business needs.

The CBN said the hubs would be located in areas with high volumes of commercial activities and cash transactions.

READ ALSO: CBN Reviews Operations Of NIBBS Instant Payments System, Others

It further stated that the hubs would provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled.

“This guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision,” the CBN stated.

According to the CBN, the key objective of setting up the BNCH was to reduce the risks and cost borne by banks, merchants and huge cash handlers in the course of cash management activities; deepen financial inclusion, and leverage on shared services to enhance cash management efficiency.

The CBN said the BNCH’s duties included receipt of naira denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash; disbursement of naira- denominated withdrawals on behalf of financial institutions to individuals and businesses with high volumes of cash, and any other activities that might be permitted by the apex bank.

PUNCH.