House Urges CBN to Direct Banks on Prompt Reversal of Failed Transactions

Adedayo Akinwale in Abuja

The House of Representatives has called on the Central Bank of Nigeria (CBN) to direct banks to work on their systems so as to mitigate failed transactions as well as immediately reverse failed transactions without the customers’ prompting.

The Green Chamber also urged the apex bank to direct banks to reverse customers’ funds within the stipulated periods whether or not the customers lodge complaints.

The resolution of the House was sequel to the adoption of a motion on the need to restrain commercial banks from holding funds reversal beyond the date prescribed by the CBN, which was moved at plenary yesterday, by Hon. Emmanuel Ukpong–Udo.

Presenting the motion, Ukpong–Udo said according to the Nigeria Inter-Bank Settlement System Plc, over 135, 500,000 Nigerians use banks.

He added that the CBN released a press release on June 8, 2020, revising timelines for reversals and resolution of refund complaints.

Additionally, he stressed that one of the CBN’s resolutions was on failed “On-Us” ATM transactions (when customers use their cards on their bank’s ATMs) shall be instantly reversed from the current timeline of three days, and where instant reversal fails due to any technical issue or system glitch, the timeline for manual reversal shall not exceed 24 hours;

The lawmaker said the CBN also resolved that refunds for failed “Not-on-US” ATM transactions (where customers use their cards on other banks’ ATM) shall not exceed four hours from the current three to five days.

Ukpong–Udo added that the CBN further resolved that resolution of disputed/failed POS or Web transactions shall be concluded within 72 hours from the current five days.

He noted that the CBN also resolved that all banks were directed to resolve the backlog of all ATM, POS, and Web customer refunds within two weeks starting June 8, 2020.

The lawmaker expressed worry that Nigeria’s financial sector was facing serious concerns due to persistent complaints of failed customer transactions, with over 69 per cent of complaints in July 2023, made up of failed transactions.

Ukpong–Udo, pointed out that the rapid increase in numbers of failed banks and the magnitude of the problem had reached an unprecedented level.

He expressed worry that the high rate of failed bank transactions was causing a decrease in business investments and lending across the country.

The House resolved: “Urge the Central Bank of Nigeria to direct banks to work on their systems in mitigating failed transactions and immediately reverse failed transactions without the customer’s prompting;

“Also urge the Central Bank of Nigeria to direct banks to reverse customers’ funds within the stipulated periods whether or not the customers lodge complaints.”

The House also mandated the Committees on Banking Regulations, Banking and other Ancillary Institutions, and Digital and Electronic Banking to liaise with the apex bank and Nigeria Interbank Settlement System (NIBSS) to look into the issues and provide solutions.