By EMMA UJAH, ABUJA BUREAU CHIEF

ABUJA — The Central Bank of Nigeria, CBN, has set December 2016 deadline to terminate its role as Lender of Last Resort for the Real-Time Gross Settlement, RTGS, payment system, in the country.

Prior to 2006, large value payments in Nigeria were settled through a deferred net settlement system and the CBN had to commence operations of RTGS System to increase the efficiency of time-critical payments, given the defects of the net settlement system and in view of the sensitive nature of wholesale payments, which were settled through a deferred net settlement system.

The CBN, Governor, Mallam Sanusi Lamido Sanusi disclosed this at the opening of the International Conference on Payments System and launch of the revised Nigerian Payments System Vision2020 Strategy document, in Abuja, yesterday.

According to him, the decision was one of the key recommendations of the revised Nigerian payments Systems Vision 2020.

Sanusi said: “It is pertinent to note that the key recommendations resulted from a much higher target for compliance than was possible in 2007, due to the significant progress already achieved.

“Specifically the Central Bank of Nigeria shall: ensure that henceforth, no national payments system shall invoke the principle of unwind. CBN will formally inform the industry that unwinds must not be invoked in any national payment system. Each payment scheme must define and formally document the exact point at which payments are deemed to be ‘final and irrevocable’; remove its implicit role of ‘Lender of Last Resort’ for the RTGS payment system by December 2016 and Deferred Net Settlement systems by December 2019.”

It was introduced to reduce liquidity risk, eliminate credit risk and increase the efficiency of treasury operations of banks and Discount Houses.

He added that it would also stop the Deferred Net Settlement systems by December 2019. An outline of deployment plan, according to Mal. Sanusi, would be published by the apex bank to show steps towards the objective.

CBN’s decision to stop unwinds being invoked means that after an electronic transaction has reached a certain stage it can no longer be reversed.

…says epileptic power supply, inefficient communications crippling e-payments system

THE CBN Governor, Mallam Sanusi Lamido Sanusi has identified epileptic electric power supply and inefficient communications networks as major impediments to the Nigerian payments system.

He said: “In spite of the success so far recorded, the Nigerian payments system continued to face some daunting challenges, including: infrastructure deficit (power and communication network), slow adoption of e-payments due to prevailing cash culture and merchant’s apathy to POS terminals due to transaction fee”.

Sanusi added that the high illiteracy level coupled with low level of public awareness on the existence of some e-payment products, concentration of e-payment facilities in the urban centre and unavailability of financial services in most rural areas, lack of effective national identification system, and the absence of e-payment laws or National Payments System Act, were other factors impeding the growth of e-payments system in the country.

The apex bank, he said recognized that innovations in payments system require institutional support, which was why it has issued several relevant rules and regulations, to provide a level playing field for stakeholders, as well as, foster consensus and  cooperation amongst a broad number of payments service providers and enhance public confidence in the system.