Central Bank of Nigeria (CBN) has set November 30 deadline for banks in the country to meet specified payment card security specifications, in a move to combat card fraud in the financial system.
This is a major step to safeguarding personal and account information conveyed in processing card payments.
The apex bank, in the circular with reference: BPS/DIR/GEN/01/004, titled “Circular on timeline for PCIDSS certification by all deposit money banks, switches, processors,” threatened to “invoke appropriate sanctions for non-compliance with the provisions of this circular.”
The circular signed by Dipo Fatokun, director of the CBN’s Banking & Payments Systems Department, recalled a previous circular on the need to combat card fraud, with reference: BPS/DIR/GEN/CIR/01/08 dated May 25, 2012, banks were required to comply with the Payment Card Industry Data Security Standards (PCIDSS) before December 31, 2012.
The extension of the deadline, the circular added, followed requests by many of the banks to enable them complete the certification process.
The CBN, the circular added, thereafter, also engaged the services of three Qualified Security Assessors (QSAs) to conduct pre-certification assessment of banks to determine their readiness.
“The result of the assessment showed that while many banks and processors have complied with the standards, some are at various stages of compliance.
According to the CBN’s report for the first half of 2013, released on February 19, this year, the apex bank said there were 2,478 fraud and forgery cases among Nigerian banks, valued at N22.4 billion. The figure was higher than the 2,300 recorded cases, valued at N7.1 billion in the corresponding period of 2012.
“Of this amount, actual loss incurred by the banks was N3.8 billion, representing 17.1 per cent of the total fraud amount, compared with N2.5 billion in the corresponding period of 2012,” and were carried through diverse means.
They include fraudulent withdrawals from customers’ accounts, suppression and conversion of customers’ deposits, theft, illegal funds transfer, cheque defalcations, and fraudulent ATM withdrawals, among others.
“To mitigate the increased operational risk as a result of these frauds, several measures were recommended to improve the DMBs risk management control function. These measures included the implementation of stricter internal control, improved technology audit to routinely check employees’ activities and a more thorough approach to hiring employees for highly sensitive areas of operation,” the report added.