On Tuesday, the House of Representatives directed the Central Bank of Nigeria to prevent commercial banks from keeping customer money that have been reversed for longer than the time frame that the central bank had set.

The resolution of the House followed the adoption of a motion titled, “Need to restrain commercial banks from holding funds reversal beyond the date prescribed by the Central Bank of Nigeria,” moved by a member representing Ikono/Ini Federal Constituency, Akwa Ibom State, Mr Emmanuel Ukpong-Udo.

The lawmaker referred back to a June 8, 2020, statement from the CBN outlining timelines for refund complaints and reversals. Among the timelines were those for failed “On-Us” automated teller machine transactions, which occur when customers use their cards on the bank’s ATMs. These transactions “shall be instantly reversed from the current timeline of three days,” the representative said.

He also noted that “Where instant reversal fails due to any technical issue or system glitch, the timeline for manual reversal shall not exceed 24 hours; refunds for failed ‘Not-on-US’ ATM transactions (where customers use their cards on other banks’ ATM) shall not exceed 4 per cent hours from the current 3-5 days.

“Resolution of disputed/failed POS or web transactions shall be concluded within 72 hours from the current five days,” stressing that “All banks are directed to resolve the backlog of all ATM, POS, and web customer refunds within two weeks starting June 8, 2020.”

As the legislator led the discussion he said, “The House is worried that Nigeria’s financial sector is facing serious concerns due to persistent complaints of failed customer transactions, with over 69 per cent of complaints in July 2023 encompassing failed transactions

“Cognizant of the rapid increase in numbers of failed banks and the magnitude of the problem which has reached an unprecedented level and alarmed that the high rate of failed bank transactions is causing a decrease in business investments and lending across the country,”

The House urged the CBN to direct banks to work on their systems in mitigating failed transactions without the customer’s prompting.

It also urged the apex bank to direct banks “To reverse customers’ funds within the stipulated periods whether or not the customers lodge complaints.”

As a result, the Committees on Banking Regulations, Banking and Other Ancillary Institutions, and Digital and Electronic Banking were established by House directive “To liaise with the apex bank and Nigeria Interbank Settlement System to look into the issues, provide solutions and report back to the House within four weeks for future legislative action.”