The Central Bank of Nigeria (CBN) has approved the Nigerian Payments System Risk and Information Security Management Framework to guide the management of risks associated with the payments system in the country.
The objectives of this framework include identifying and addressing the sources of systemic risks within the Nigerian payments system landscape, establish sound governance arrangements to oversee the risk management framework by ensuring that risks are identified, monitored and treated.
Other objectives are to establish clear and appropriate rules and procedures to carry out the risk management objectives, employ the resources necessary to achieve the payments the system’s risk management objectives and to integrate risk management into the decision-making processes of the Scheme Boards and Working Groups under the Payments System Vision 2020 (PSV 2020).
The CBN explained that the framework was designed to guide the operators and users of the payment systems across Nigeria. These systems may be organized, located or operated within Nigeria, outside Nigeria, or both and may involve currencies other than the naira.
The scope of the framework also includes any payment system based or operated in Nigeria that engages in the settlement of non-naira transactions operating within Nigeria and those that operate across the Nigerian borders along with their infrastructure providers and the Payment Service Providers (PSPs) that make up these systems.
This framework does not apply to arrangements for the physical movement of cash or systems for settling securities nor apply to market infrastructures such as trading exchanges, trade-execution facilities or multilateral trade-compression systems.
It is also not intended to apply to bilateral payment, clearing or settlement relationships where a payment system is not involved between financial institutions and their customers, such as traditional correspondent banking and government securities clearing services.
The Payments System Management Department of the CBN is responsible for setting, applying and coordinating risk standards across the Nigeria payments space. It is supported by the Payments Initiative Coordinating Committee and the four Scheme Boards.