CBN Extends Settlement Banking Arrangement

Obinna Chima

The Central Bank of Nigeria (CBN) has postponed until further notice it earlier directive for banks to adhere to settlement banking arrangement for all clearing sessions.

The central bank stated this in a circular that was signed by its Director, Banking and Payments System Department, Mr. Dipo Fatokun, a copy of which was posted on its website.

It explained: “You will recall that a directive was issued on the extension of settlement banking arrangement that is being practiced for cheque clearing sessions one and two to other net settlement sessions (0 and 3) vide our circular referenced BPS/DIR/CIR/GEN/02/039, dated November 10, 2017.

“The aforementioned circular directed the settlement banks to update the agency agreements with their respective non-settlement banks, while merchants banks that do not have settlement banks should appoint settlement banks and inform the Director, Banking and Payment System Department, CBN Abuja, on or before 15th December, 2017.

“Please note that the new extension of settlement banking to all clearing sessions with effect from January 2, 2018, as contained in the referenced circular, is hereby suspended until further notice.

“For the avoidance of doubt, the existing policy that was introduced in April 2004, on settlement banking relationship for session one and two (cheque and NEFT clearing instruments) only shall remain in force.”