CBN directs banks to collect revenue for electricity

The Central Bank of Nigeria (CBN) has issued guidelines to banks on revenue collections for electricity companies.

In a letter to all banks, which was signed by Bello Hassan, Director Banking Supervision, the CBN said; “banks providing Bank Guarantees to Nigeria Bulk Electricity Trading (NBET) Plc and the Transmission Company of Nigeria (TCN) on behalf of Distribution Companies (DisCos), would take full responsibility for: the collections of the concerned DisCos, and; the remittances of the DisCos to both NBET and TCN.”

Kano electricity company loses N260m in 3 months to vandalism

FG to spend N2.3trn stimulus fund on rural electricity, others

For the avoidance of doubt, the letter noted that “no DMB is permitted to open or continue to maintain a collection account for a DisCo without the express no-objection of the DMB that guaranteed its exposure to NBET or TCN.”

It also said the payment or settlement of all Nigerian Electricity Supply Industry (NESI) related goods or services shall be made through the Nigerian Banking System.

Consequently, it said “all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that: a. Collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo; b. 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).”

The letter also indicated that all energy and non-energy collections of DisCos, whether cash or cashless, shall only be performed by Deposit Money Banks (DMBs).

“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, therefore: a. The DMB shall be permitted to authorize its agents to collect energy and non energy payments on its behalf for any DisCo, b. The actions or inactions of the agent shall be the responsibility of the authorizing DMB.”