The Central Bank of Nigeria (CBN) has moved aggressively to restore public confidence in the nation’s digital banking ecosystem, issuing a stringent directive that mandates commercial banks to fully reimburse customers who fall victim to Authorized Push Payment (APP) fraud within a strict 48-hour timeframe.
The order, communicated via a recent circular to all Deposit Money Banks (DMBs), highlights the CBN’s resolve to hold financial institutions accountable for lapses in their security infrastructure and customer protection protocols.
The CBN’s directive specifically targets APP fraud, a growing challenge where fraudsters trick customers into initiating and approving fund transfers to a criminal account.
Banks must now process and complete the reimbursement of funds lost to verified APP fraud cases within two business days (48 hours) of receiving a formal complaint from the customer.
The CBN emphasized that this measure is intended to shift the burden of proof and the financial cost of fraud away from the victim and onto the banks, forcing them to invest more robustly in fraud detection, prevention, and security education.
The directive applies where the customer can prove they were deceived or manipulated into making the payment, and where the bank’s internal controls failed to flag or prevent the suspicious transaction.
The intervention comes in response to escalating reports of digital fraud, which have undermined consumer trust and slowed the adoption of critical digital financial services.
Industry reports show that digital fraud attempts, particularly via mobile banking and internet transfers, surged by over 45% in 2024, resulting in billions of Naira in losses for customers and the banking industry.
By placing a clear, time-bound responsibility on banks for reimbursement, the CBN aims to end the practice of banks engaging in lengthy investigations that often leave the victim without access to their funds for weeks or months.
While the directive is a major victory for consumer protection, its successful implementation faces immediate challenges such as, banks will need sophisticated, rapid systems to verify the authenticity of the APP fraud claim within 48 hours to prevent abuse of the new policy by customers attempting fraudulent claims themselves.
More so, the strict timeframe will necessitate massive, immediate investment by banks in Artificial Intelligence (AI) and Machine Learning (ML) anti-fraud tools capable of detecting manipulation and transaction anomalies in real-time.
Of note, the CBN still expects customers to exercise caution. The new policy must be accompanied by aggressive public education campaigns to help customers distinguish legitimate banking communications from phishing and social engineering attempts.
The CBN’s move is a powerful statement prioritizing customer confidence, but its ultimate success hinges on the banks’ ability to rapidly upgrade their technology and internal compliance processes within the given 48-hour window.
