Banks to Take Over Electricity Bill Collections from Distribution Companies
In a bid to ease collections and remittances challenges that have almost crippled the power sector, the Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) to take charge of collections and remittances of electricity bill from Power Distributing Companies (DisCos).
In a circular dated August 21, the Director of Banking Supervision, CBN, Bello Hassan, said the decision would help improve payment discipline in the power sector.
The Central Bank of Nigeria (CBN) has asked banks to take responsibility for collecting electricity bill payments.
The circular said, “The payment or settlement of all NESI related goods or services shall be made through the Nigerian banking system.”
“Consequently, 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)
“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, 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. 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.”
Also, the central bank directed all banks providing guarantees to Nigeria Bulk Electricity Trading (NBET) Plc and the Transmission Company of Nigeria (TCN) on behalf of DisCos to take full responsibility for remittances and collections of the DisCos to both NBET and TCN.
“For the avoidance of doubt, 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 said.
The Nigerian Electricity Regulatory Commission (NERC) quarterly report showed collection from DisCos is low and has continued to negatively impact the liquidity of the industry.
