CBN Governor
CBN Governor

Central Bank of Nigeria, CBN, has released a new transactions switching guideline for the financial sector in Nigeria. This was disclosed in a statement obtained at the apex bank website.
The statement further explained that the guidelines were to promote and facilitate the development of efficient and effective systems for the settlement of transactions, including the development of electronic payment systems.
It however added that the guideline supersedes the previous Guidelines on Transaction Switching Services and the Operational Rules and Regulations for the Nigeria Central Switch, which was operational.
According to statement, “The Guidelines set out the procedures for the operation of switching services in Nigeria, including the rights and obligations of the parties to the switching contract. It also compels the switching companies to meet with minimum standards for switching, as approved by the CBN.”
Some of the new requirements are that for a switching company to operate in Nigeria, it shall obtain a Switching license from the CBN; Parties to Transaction Switching include, but not limited to: Nigeria Central Switch, switching companies Card Issuers. Concerning the rights and responsibilities of a Switching Company, the apex bank stated that a switching company is expected to operate its switch in accordance with these guidelines; ensure compliance with minimum standards on Transaction Switching, as provided in these Guidelines and open its network for reciprocal exchange of transactions/messages between it and the Nigeria Central Switch.
It is required to enter into agreement with member institutions, specifying in clear terms the responsibilities of each party, operational rules and procedures and liabilities of parties in the event of loss of funds arising from negligence of any of the parties.
While a copy of the agreement shall be submitted to the CBN for record purposes the company must ensure that all notifications and information that its employees have obtained in the course of discharging their responsibilities are treated as confidential.
Operators are also required to establish adequate security procedures to ensure the safety and security of its information and those of its clients, which shall include physical, transactions, logical, network and enterprise security.
The participating companies are also expected to submit to the CBN, its security plans and periodic updates. However, any security breach shall have a record and such instances shall be reported to CBN for record purposes.
They are also supposed to have a business Continuity Plan, approved by the CBN; ensure full compliance with relevant provisions of payments system guidelines, policies and Circulars issued by the CBN, in relation to its operations.
Operators must not be an issuer of payment cards; and should supply to the CBN, information on usage, volume and value of transactions and other relevant information, as and when due, and in the format required by the CBN.
Report all instances of fraud/attempted fraud on the switch to the CBN. In addition to the primary site, maintain a business continuity arrangement, to ensure failsafe operation.