CBN Gives Banks Sole Right for Electricity Bill Collection, Bans Discos
The Central Bank of Nigeria (CBN) has tasked banks with the responsibility of collecting electricity bill payments.
This was gathered from a circular released by Bello Hassan, CBN’s director of banking supervision, which said that taking over from electricity distribution companies will improve payment discipline in the industry.
The circular read that the payment or settlement of all NESI related goods or services shall be made through the Nigerian banking system.
It also read that all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo; collections arising from services rendered by a third party/parties on behalf of the DisCo shall be paid into an account in the joint name of the DisCo and the third-party vendor(s).
It was also gathered that all energy and non-energy collections of DisCos, whether cash or cashless, shall only be performed by deposit money banks (DMBs) and that no entity shall be permitted to collect revenues for DisCos except if that entity is so authorized by a DMB in line with the relevant CBN guidelines for agent banking and agent banking relationships.
It was also noted that the DMB shall be permitted to authorize its agents to collect energy and non-energy payments on its behalf for any DisCo; the actions or inactions of the agent shall be the responsibility of the authorizing DMB.
The circular warned that any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any DisCo without appropriate authorization shall have regulatory actions imposed on it.
The apex bank also directed that banks providing bank guarantees to Nigeria Bulk Electricity Trading (NBET) Plc and the Transmission Company of Nigeria (TCN) on behalf of DisCos, would take full responsibility for the collections and the remittances of the DisCos to both NBET and TCN.
According to the latest quarterly report of the Nigerian Electricity Regulatory Commission (NERC), the collection efficiency by the DisCos is low and has continued to adversely impact the financial liquidity of the industry.