The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) to take charge of electricity market collections.
This is to boost the quality of electricity generation, transmission and distribution across the country.
By this directive, collections and remittances of the DisCos to the Nigerian Bulk Electricity Trading (NBET) and Transmission Company of Nigeria (TCN) would be done by DMBs.
The CBN, in the circular, noted that “all DisCo collections both cash and cashless will be regarded as an energy collection except identified otherwise”.
What this means is that the money collected during transactions and the remittance of this money to NBET and TCN will be borne by DMBs.
The CBN in its August 21, 2020 circular BSD/DIR/GEN/LAB/13/049 entitled: ‘’Letter to all banks: DMB led electricity market collections noted that the banks are also responsible in providing guarantees to DisCos.
This decision, the circular said, is “in line with a directive of the Power Sector Coordination Working Group to improve payment discipline in the Nigerian Electricity Supply Industry (NESI)”.
According to the CBN circular, banks providing bank guarantees to NBET and the TCN on behalf of DisCos, would take responsibility for the collections of the concerned DisCos, and the remittances of the DisCos to both NBET and TCN.
The circular insisted that no DMB is allowed to open or continue to maintain a collection account for a DisCo without the no-objection of the DMB that guaranteed its exposure to NBET or TCN
Also, collections for the payments of NESI regulated goods and services provided by a DisCo should be paid into a designated account such that collections from services rendered by the DisCo should be paid into an account in the sole name of the DisCo, the circular said.
The CBN ordered that collections from services by a third party/parties for the DisCo should be paid into an account in the joint name of the DisCo and the third- party vendor(s).
Also, energy and non-energy collections of DisCos would only be performed by banks.
The apex bank warned that no entity has the right to collect revenue for DisCos except it is authorised by a DMB in line with the CBN guidelines for agent banking and agent banking relationships.
However, DMBs are allowed to authorise their agents to collect energy and non-energy payments for a DisCo. Banks would be held liable for the action or inactions of their agents.
According to the CBN, any DMB found guilty would be sanctioned.
The circular added: “DMBs are to work with relevant stakeholders to ensure that electricity customer payment channels/endpoints must identify electricity market payments in such a way as to provide the identification of these payments and information relating to: DisCo, the DisCo Account Information such as Account ID, Customer ID, Meter ID etc.”
