N120bn Debt: CBN Wades Into DMBs, Telcos USSD Crisis

The Central Bank of Nigeria (CBN) has once again waded into the areas of contention between the Deposit Money Banks (DMBs) and Telecom Operators in Nigeria (Telcos), relation to collection of telcos charges for USSD.

CBN’s Ag. Director, Corporate Communications Department, Dr. Isa AbdulMumin in a statement on Sunday said, the bank had taken some steps to resolving the crisis in the interest of the financial system and overall economy.

Recall, the Association of Licensed Telecom Operators in Nigeria (ALTON), on Friday threatened to withdraw USSD services rendered to the banks over non remittance of about N120billion USSD fees collected by the banks.

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A statement jointly signed by the Chairman and Head of Operations of ALTON, Gbenga Adebayo and Gbolahan Awonuga respectively, said, the approval was granted because despite multi-party stakeholder efforts to resolve the situation and prevent any impact on services, especially the efforts made by the Minister of Communication and Digital Economy, Prof. Isa Pantami and the Nigerian Communications Commission (NCC), the banks have continued to incur greater and greater debt, without making the commensurate payments.

Meanwhile, the CBN said, it was very much aware of the protracted dispute between the banks and telcos and has been engaging all stakeholders to ensure amicable resolution.

The apex bank said, it was due to it direct intervention (or CBN Governor) in March 2021 that a per session price of N6.98 (including to settle any outstanding fees) was agreed upon between the banks and telcos.

“As far as we are aware, since 2021, DMBs continue to collect the USSD fees and remit same on behalf of the telcos based on that agreement.

“We understand the latest dispute concerns technical issues regarding definition of a successful transaction from a bank and telco perspective.

“USSD fees are charged by DMBs using an automated system which bills the customer for a successful transaction only after a banking service is consumed.

“For the Telcos, a successful transaction happens once the customer has dialled the USSD short-code which may not lead to the consummation of a banking service. Whilst Such truncated transactions are not registered on the DMBs collection platform and thus not billed to bank customers, telcos expect the DMBs to charge customers once the short-code is dialed, whether or not a financial transaction is consummated.

“At a recent meeting of the DMBs & Telvo representatives chaired by the Governor, CBN to resolve the issue, he acknowledged the telcos right to collect all legitimately earned fees due to them and to recover their cost.

“Following the discussion, the direct billing model was proposed as a lasting solution to the issue. This would enable telcos full visibility of USSD transactions and allow them to charge their customers directly. The feasibility of the model is still being worked out by the relevant stakeholders.

“USSD is a critical channel leveraged on primarily by the financially excluded, vulnerable and critical mass. The CBN remains committed to ensuring that the areas of contention related to collection of telco charges for USSD are resolved in the interest of the financial system and overall economy”, CBN said.

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