Adedapo Adesanya
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has established a Risk and Information Security Management Framework, which it says will help promote effective management of monetary policy and tackle systemic risks in the financial space.
The framework will also help to guide the management of risks associated with the payment system in Nigeria, according to the document released by the apex bank on Monday.
The CBN said it is charged with the overall responsibility for the management of risk across the National Payments System and is expected to drive the overall National Payments System Strategy, provide cross-scheme resource and arbitrate in cross-scheme decisions.
It noted that the objective of the framework was to identify and address sources of systemic risks within the Nigerian Payments System landscape; establish sound governance arrangements to oversee the risk management framework by ensuring that risks are identified, monitored and treated.
It also added that the framework would, “Establish clear and appropriate rules and procedures to carry out the risk- management objectives, employ the resources necessary to achieve the payments system’s risk management objectives; and integrate risk management into the decision-making processes of the Scheme Boards and Working Groups under PSV 2020.”
Furthermore, it added that the scope was designed to guide the operators and users of the payment systems across Nigeria (domestic), outside Nigeria (offshore), and both (cross border payment systems); along with their infrastructure providers and the Payment Service Providers (PSPs) that make up these systems.
In additional, the CBN notedthat, “This framework does not apply to arrangements for the physical movement of cash or systems for settling securities nor apply to market infrastructures such as trading exchanges, trade-execution facilities, or multilateral trade-compression systems.
“It is also not intended to apply to bilateral payment, clearing, or settlement relationships, where a payment system is not involved, between financial institutions and their customers, such as traditional correspondent banking and government securities clearing services.” It stated.
The document further identified the basic risks in payments system which include systemic risk, credit risk, liquidity risk, operational risk, legal risk, settlement risk and information security risk.
