CBN extends settlement banking arrangement to all clearing sessions
by HOPE MOSES-ASHIKE
November 10, 2017 | 5:37 pm| | | Start Conversation
The Central Bank of Nigeria (CBN) has extended settlement banking arrangement to all the clearing sessions with effect from January 2018.
Consequently, the settlement of net clearing obligations from Central Securities Clearing System (CSCS), cheques, cards, ach, Nigeria Inter-bank Settlement System Instant
Payment (NIBSS) NIP), NIBSS Electronic Funds Transfer (NEFT), and other clearing instruments shall be through the account of settlement bank only.
The CBN had in April 1, 2004, introduced settlement banking framework, which categorised deposit money banks into settlement and non-settlement banks.
The settlement banks settle their net settlement obligations and that of their non-settlement banks arising from cheque clearing and other instruments during session 1 and 2. The non-settlement banks enter into agency agreement with settlement banks and pledge appropriate collaterals accordingly.
Dip Fatokun, director, banking and payments system department, CBN said in circular released on Friday that the framework has been working well and contributed to the relative stability in the net settlement operations for settlement of clearing sessions 1 and 2 on the Real Time Gross Settlement (RTGS) system.
The CBN advised settlement banks to update the agency agreements with their respective non-settlement banks. The CBN urged merchant banks that do not have settlement banks to appoint one and inform the banking and payments system department on or before December 15, 2017 with the copy of the letter from the settlement banks accepting to settle for them.
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