Legislators Propose Measures To Prevent Banks From Holding Reversed Customer Funds

Legislators Propose Measures To Prevent Banks From Holding Reversed Customer Funds....KINDLY READ THE FULL STORY HERE▶

The House of Representatives issued a directive on Tuesday, instructing the Central Bank of Nigeria (CBN) to ensure that commercial banks adhere to the stipulated timeline for the reversal of customers’ funds. The resolution followed the presentation of a motion titled, “Need to restrain commercial banks from holding funds reversal beyond the date prescribed by the Central Bank of Nigeria,” by Mr. Emmanuel Ukpong-Udo, a representative from Ikono/Ini Federal Constituency, Akwa Ibom State.

Ukpong-Udo highlighted the CBN’s previous announcement on June 8, 2020, establishing timelines for the reversal and resolution of refund complaints, particularly for failed “On-Us” ATM transactions. The motion emphasized that such reversals should occur instantly, with a maximum timeline of 24 hours for manual reversals in case of technical issues. Additionally, refunds for failed “Not-on-US” ATM transactions were expected within 4 percent hours, and the resolution of disputed/failed POS or web transactions within 72 hours.

Expressing concern over the financial sector’s challenges with persistent complaints of failed customer transactions, the House noted that over 69 percent of complaints in July 2023 were related to failed transactions. The lawmakers stressed the adverse impact of the high rate of failed bank transactions on business investments and lending in the country.

In response, the House urged the CBN to direct banks to proactively address system issues causing failed transactions and mandated them to reverse customers’ funds within the specified periods, regardless of whether customers lodge complaints. Additionally, the House assigned the Committees on Banking Regulations, Banking and other Ancillary Institutions, and Digital and Electronic Banking to collaborate with the CBN and the Nigeria Interbank Settlement System. Their task is to investigate the issues, propose solutions, and report back to the House within four weeks for further legislative action. This resolution aims to tackle the challenges in Nigeria’s financial sector, enhance customer confidence, and promote smoother banking transactions.

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