Banks urged on instant reversal of wrong electronic transfer funds. 

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The Central Bank of Nigeria (CBN) directed all licensed financial institutions who facilitates electronic funds transfer services to reverse within two weeks, any error involving a customer transferring funds to a wrong person.  The instruction was included in the draft guidelines signed by the Director, Banking and Payment System Department of CBN, Dipo Fatokun, which was directed to all deposit money  banks, other financial institutions and payment service provider or instant electronic transfer funds in Nigeria.  The CBN disclosed that the motive of the directives is to ensure high standard of conduct and management throughout the banking system in line with the authority given to it by section 28 (1) (b) of the Central bank of Nigeria act 1991.  The act states that:  “where a Sending Entity sends a transaction with a wrong account number to a Receiving Entity and requests the reversal within 14 days of the transaction, the Receiving Entity shall immediately oblige without recourse to the customer (beneficiary) of the Receiving Entity provided funds are available. “ An automatic indemnity shall be inferred against the Sending Entity making the reversal request. Where funds are not available, the Receiving Entity shall immediately formally notify its customer that the account was wrongly credited with feedback to the Sending Entity. The customer shall be notified that the consequence of not funding the account within 24 hours includes watch-listing in the financial system, BVN system, Credit Bureau and reporting to law enforcement agencies.” Calling for more input from stakeholders, the apex bank explained that the Receiving Entity shall reverse the transaction as soon as funds are either partially or wholly available.  In a situation where the beneficiary of the wrong account is known to the Sending Entity, the bank will encourage the complainant to get in touch with the beneficiary and settle it amicably.  It further explained that the Sending Entity having received a reasonable entitlement from the customer shall notify the Receiving Entity who shall lien the amount from the account of the beneficiary and also obtain the consent of the beneficiary to make the refund.  “Where the beneficiary does not give consent the chief internal auditors of the Sending and Receiving Entities shall adjudicate between the two customers, within two weeks of the complaint to resolve the issue, and their decisions shall be final,” the CBN disclosed. Accordingly, the apex bank stated, the freezing of the account shall not last more than two weeks and where the supposed beneficiary has utilized the fund such that lien could not be placed, and he/she refuses to fund the beneficiary account to facilitate refund,the Receiving Entity’s Chief Internal Auditor shall watch-list the customer’s Bank Verification Number (BVN) and the Sending Entity may seek the assistance of Law Enforcement Agencies (e.g., Police, EFCC, NFIU, etc) for recovery.  The directives however described the Sending Entity as a Nigerian company of Financial institution licenced by the CBN to operate the facilitation of electronic funds transfer services in Nigeria and who also carries out the services on behalf of its customers, while a Receiving Entity is a Nigerian company or financial institution approved by the CBN to facilitate electronic funds transfer services in Nigeria and who receives instant EFT on behalf of its customers.  Source: Tribune

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