Its Director, Banking & Payment System, Dipo Fatokun, said although the compliance level among banks is high, the long-term plan is to achieve total conformity among lenders.
Fatoku, who spoke at CBN meeting in Lagos, said the few lenders that are yet to comply with the directive have sought more time which the CBN is considering because it involves technology upgrade.
“The banks have also seen the need to comply. The few exceptions have told us when they will comply because it is a technology issue, which is beyond the scope of their operators. They are doing it in phases, and for those with large number of ATMs are doing it gradually. The confidence in the use of ATMs is very high at present,” he said.
Fatokun said although the adoption of ATMs by Nigerians as one of the channels of e-payment is laudable, the transactions through the channels needed to be protected.
He said all banks are to comply with the provisions of Section 3.2 ‘ATM Operations’ and 3.4 ‘ATM Security’ of the standards and guidelines of ATM Operations in Nigeria and also install risk mitigating devices on their ATM terminals on or before June 1, 2014.
He said the CBN is committed to ensuring that the deployment and management of ATMs are in line with global best practices. “We have observed with dismay, an upward up-ward increase in ATMs-related fraud in the banking system. The development, he said, does not portend good for the industry and requires urgent steps to curb the abuse,” he said.
The CBN had earlier set up a five-year Information Technology (IT) Standards for banks. The CBN said the exercises would help banks identify and adopt global IT Standards that address industry problems. It said banks are expected to implement the plan on continuous basis and in accordance with set timelines with compliance audits billed to begin at the end of first quarter.
Fatokun said the introduction of chip and pin payment cards have led to drastic drop in ATM card fraud. He said the Central Bank and other relevant institutions have been able to reduce card frauds considerably by instituting ATM Fraud Prevention Group and the Nigeria Electronic Fraud Forum (NeFF). The groups are to enable banks to collaboratively share data on fraud attempts and proactively tackle them to reduce losses.
According to him, the CBN instructed banks to set and implement mandatory daily limits for ATM cash withdrawal, while other related transactions, including POS and Web purchases should be subjected to stringent limit as agreed and documented between the banks and customers. He said it is the responsibility of the banks to ensure that a trigger is automatically initiated when limits are exceeded.
According to him, the use of second level authentication for internet transactions was compulsory for all payment cards, stressing that it was the responsibility of the issuer to ensure that transactions emanating from its web merchants are properly scrutinised and operations are permitted only after the second level verification.