The Central Bank of Nigeria (CBN) has issued a directive to banks to collect electricity bill payments.
In a circular dated August 21, Bello Hassan, CBN’s director of banking supervision, said taking over from electricity distribution companies will improve transparency in the power sector.
“The payment or settlement of all NESI related goods or services shall be made through the Nigerian banking system,” the circular stated.
“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.”
The apex bank also directed that banks providing bank guarantees to Nigeria Bulk Electricity Trading (NBET) Plc and the Transmission Company of Nigeria (TCN) on behalf of DisCos, would take full responsibility for the collections and the remittances 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 Cable reported that in the latest quarterly report of the Nigerian Electricity Regulatory Commission (NERC), the collection efficiency by the DisCos is low and has continued to adversely impact the financial liquidity of the industry.
Revenue generation is one of the major challenges of the power sector. DisCos keep lamenting over revenue shortfalls attributed to low electricity tariff. But this new directive from the CBN is suggesting that electricity revenue has been going into the wrong accounts.
However, Nigerians are concerned that the directive is coming from the Apex bank instead of the National Electricity Regulatory Commission (NERC). Given that the DisCos are privately owned companies, many are questioning the right the central bank has to direct them on how to receive electricity bill payment.