The Central Bank of Nigeria has released the Nigerian Payment Systems Risk and Information Security Management Framework to guide the management of risks associated with payment systems in the country.
The CBN released the guidelines on its website on Monday and said one of the objectives of the framework was to identify and address sources of systemic risks within the Nigerian Payment System landscape.
The bank explained that it would help to establish sound governance arrangements to oversee the risk management framework by ensuring that risks were identified, monitored and treated.
According to CBN, the framework will help to establish clear and appropriate rules and procedures to carry out the risk-management objectives.
It stated that it would also facilitate to employ the resources necessary to achieve the payments system’s risk management objectives; and integrate risk management into the decision making processes of the Scheme Boards and Working Groups under PSV 2020.
“This Framework is designed to guide the operators and users of the payment systems across Nigeria.
“These systems may be organised, located, or operated within Nigeria domestic payments, outside Nigeria offshore payments, or both cross-border payments and may involve currencies other than the Naira or non-Naira systems and multi-currency systems.
“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 cross border payment systems, along with their infrastructure providers and the Payment Service Providers that make up these systems.
“This framework do 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,” it explained.
Emphasising on risk management governance structure, the bank said the Payments System Management Department of the CBN was responsible for setting, applying and coordinating risk standards across the Nigeria Payments space.
The apex bank was expected to drive the overall National Payments System Strategy, provide cross-scheme resource and arbitrate in cross-scheme decisions.
The bank stated that its risk governance responsibilities was to provide risk oversight of the payments system and ensure adequate resources were allocated to risk management activities.
According the bank, others are to approve the risk strategy for the payments system, set risk parameters and tolerances within which payment system activities will be conducted.
It further stated that the bank would determine and periodically review payments system key policies and processes.