CBN suspends extension of settlement banking arrangement to all clearing sessions

The Central Bank of Nigeria (CBN) has suspended extension of settlement banking arrangement to all the clearing sessions till further notice.

READ ALSO: Governors to borrow N17 trillion from pension, CBN

The CBN had in a circular issued on November 10, 2017, extended settlement banking arrangement to all the clearing sessions with effect from January 2018.

In a circular signed by Dipo Fatokun, director, banking and payments system, the existing policy that was introduced in |April 2004 on settlement banking relationship for session 1 and 2 (cheque and NEFT clearing instruments) only shall remain in force.

- Advertisement -

READ ALSO: CBN instructs banks to provide domiciliary account statements of 16 customers

The CBN had on April 1, 2004, introduced a settlement banking framework, which categorised deposit money banks into a settlement and non-settlement banks.

The settlement banks settle their net settlement obligations and that of their non-settlement banks arising from cheque clearing and other instruments during session 1 and 2. The non-settlement banks enter into an agency agreement with settlement banks and pledge appropriate collaterals accordingly.

HOPE MOSES-ASHIKE

- Advertisement -