Central Bank of Nigeria Implements New Payments Systems

According to a report in the Nigerian Tribune The Central Bank of Nigeria has improved the Nigerian payment system with the introduction of a new Real time Gross Settlement System (RTGS) and integrated with a Scripless Securities Settlement System ( SSSS).

The new systems were produced by CMA, a Swedish company which has implemented similar solutions in all Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), Bank of Central African States (BEAC) and West African Monetary Zone (WAMZ).

The new system was announced at a press conference held in Abuja where Mr Tunde Lemo, Deputy Governor, Operations at the apex bank, said ‘‘The new RTGS is built on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging standards to allow for safer, easier and faster interconnectivity with other payment system infrastructures (both locally & internationally). It serves as the nucleus of the national payment system, as all payments finally settle in central bank money, through settlement accounts maintained for designated financial institutions. All retail payments (cheques, cards, mobile money, funds transfers, ATMs, etc) are cleared by the Nigerian Interbank Settlement System (NIBSS) and the net settlement positions of the settlement financial institutions are posted to the RTGS. Large-value payments are however settled individually (gross) as they arise, in real-time, irrevocably. This large-value settlement capability is particularly useful for interbank and government transactions”

RTGS is an interbank payment infrastructure that facilitated the real time settlement of electronic funds transfer on gross, final and irrevocable basis and replaces Project EAGLES which was introduced seven years ago as part of the then CBN transformation programme. The SSSS on the other hand is a new initiative to issue, manage and settle government and other money market securities processed as electronic records in a Central Securities Depository System (CSD).

“The SSSS centrally manages securities in electronic (dematerialised) form and is configured to settle the security trade transactions on a gross basis, using the Delivery versus Payment (DvP) Model 1 process – where both the securities and the funds are simultaneously settled with finality, on a trade-by-trade basis. The SSSS implemented is for fixed income securities (treasury bills, development bonds’’ he disclosed.