House of Representatives Urges CBN to Prevent Banks from Withholding Customers’ Reversed Funds

Edited by Afolabi Hannah

The House of Representatives has instructed the Central Bank of Nigeria to prevent commercial banks in the country from holding onto customers’ reversed funds beyond the specified timeline outlined by the apex bank.

This decision was made following 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,” put forward by Emmanuel Ukpong-Udo, a member representing Ikono/Ini Federal Constituency, Akwa Ibom State.

In a statement dated June 8, 2020, the CBN set out guidelines for reversals and handling refund complaints, specifying that failed “On-Us” ATM transactions should be instantly reversed, failed “Not-on-US” ATM transactions within 4 hours, and disputed/failed POS or web transactions within 72 hours.

Expressing concern over the high rate of failed customer transactions in Nigeria’s financial sector, which has led to a decline in business investments and lending, the House emphasized the need for banks to address system failures impacting customer transactions promptly without requiring customer complaints.

To address these issues, the House mandated the Committees on Banking Regulations, Banking and other Ancillary Institutions, and Digital and Electronic Banking to collaborate with the CBN and Nigeria Interbank Settlement System, provide solutions, and report back within four weeks for further legislative action.