CBN directs banks to take over electricity payments collections

The apex bank in a circular signed by Hassan Bello, director of banking supervision, said the decision aligns with a directive of the Power Sector Coordination Working Group to improve payment discipline in the Nigerian Electricity Supply Industry (NESI).

The circular noted that banks providing a guarantee to the Nigerian Bulk Electricity Trading (NBET) and the Transmission Company of Nigeria (TCN) on behalf of DisCos would take responsibility for collections of concerned DisCos and remittances of DisCos to both NBET and TCN.

The circular reads in part: “The payment or settlement of all NESI related goods or services shall be made through the Nigerian banking system. Consequently, all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo; collections arising from services rendered by a third party/parties on behalf of the DisCo shall be paid into an account in the joint name of the DisCo and the third-party vendor(s).

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“All energy and non-energy collections of DisCos, whether cash or cashless, shall only be performed by deposit money banks (DMBs). No entity shall be permitted to collect revenues for DisCos except if that entity is so authorized by a DMB in line with the relevant CBN guidelines for agent banking and agent banking relationships.

“Therefore, the DMB shall be permitted to authorize its agents to collect energy and non-energy payments on its behalf for any DisCo; the actions or inactions of the agent shall be the responsibility of the authorizing DMB. Any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any DisCo without appropriate authorization shall have regulatory actions imposed on it.”

The apex bank noted that no bank is permitted to open or continue to maintain a collection account for a DisCo without the express no-objection of the bank that guaranteed its exposure to NBET or TCN.