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Payment System: CBN Releases Framework

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Nigeria's apex bank, CBN on Monday 6th January 2020 released the Nigerian Payments System Risk and Information Security Management Framework to guide the management of risks associated with the payments system in Nigeria.

 

The framework which had already been approved by the apex bank became imperative in order to identify and address sources of systemic risks within the Nigerian payments system landscape.

Some of the risks that the framework is expected to address are systemic risks; credit risk; liquidity risk; operational risk; compliance, legal and regulatory risk, settlement risk and information security risk.

The framework is also meant to establish sound governance arrangements to oversee the risk management framework by ensuring that risks are identified, monitored, treated; and establish clear and appropriate rules and procedures to carry out the risk management objectives.

Other objectives of the framework are to employ the resources necessary to achieve the payments system’s risk management objectives and integrate risk management into the decision making processes.

According to the Central Bank of Nigeria, this framework will guide and aid operators as well as users of the payment systems across Nigeria.

It added that these systems may be organized, located, or operated within Nigeria (domestic payments), outside Nigeria (offshore payments), or both (cross-border payments) and may involve currencies other than the Naira.

The apex bank in the framework emphasized that it had become imperative to effectively manage the risks associated with the payments system, as disruptions may originate from any of the interdependent entities.

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