Banks to share liability for fraud losses under CBN’s new push-payment rules

Banks operating in Nigeria will now share liability for losses arising from Authorised Push Payment (APP) fraud under sweeping new rules issued by the Central Bank of Nigeria (CBN), marking a decisive policy shift that places greater responsibility on financial institutions to protect consumers in the fast-growing digital payments ecosystem.

The new guidelines, released in November 2025, introduce joint reimbursement obligations, stricter fraud controls, and tougher compliance measures as the apex bank moves to restore trust amid rising cases of social-engineering scams.

APP fraud occurs when a customer is deceived or manipulated into authorising a transfer to a fraudulent account. Unlike traditional account-takeover fraud, APP scams often rely on impersonation, coercion, and the finality of instant transfers.

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With mobile banking apps, USSD platforms, internet banking, and payment gateways handling billions in daily transactions, the CBN says banks must strengthen their safeguards to keep pace with increasingly sophisticated digital fraud tactics.

Under the new framework, financial institutions can no longer leave victims solely responsible for losses incurred after they authorise fraudulent transfers. Where neither the sending nor receiving bank is found negligent and the customer meets the eligibility criteria, both institutions must share the reimbursement cost equally. This marks a major departure from previous industry practice, where customers often bore the financial and emotional burden of such scams.

To enforce accountability, the CBN has also introduced stiffer penalties for operational lapses. Banks with weak Know-Your-Customer (KYC) processes, delayed responses to red flags, or inadequate fraud-detection systems that fail to flag suspicious payments will be debited for the full value of the fraudulent transaction. The regulator says this measure is designed to push institutions to invest in stronger early-warning systems and real-time monitoring tools.

Every bank and Other Financial Institution (OFI) is now required to deploy a comprehensive Early Warning System (EWS) with behavioural analytics, transactional red flags, and documented indicators such as unusual inflows, repeated complaints, or a history of previous fraud linkage. Each institution must also maintain a fraud-data analytics unit equipped with resources proportionate to its operational scale and risk exposure.

The new guidelines further introduce strict timelines for fraud reporting and resolution. Customers must report APP fraud within 72 hours of occurrence, while banks must acknowledge complaints within 24 hours and conclude investigations within 14 working days. Where reimbursement is approved, payments must be completed within 48 hours after the investigation.

In cases where multiple banks are involved, such as when the victim’s bank differs from the receiving institution, the originating bank must notify the other institution within 30 minutes. Both institutions are required to conduct joint investigations and agree on liability apportionment within 16 working days. If disagreements persist, the case is escalated to the CBN’s Consumer Protection and Financial Inclusion Department, whose decision is final.

Consumer protection is a strong pillar of the new framework. Customers who acted in good faith, had no reason to suspect fraud, and cooperated fully with investigators are eligible for reimbursement. Banks must also apply a higher standard of care when assessing cases involving vulnerable persons, including the elderly or individuals with disabilities.

Beyond enforcement, the CBN is pushing banks to strengthen public awareness. Institutions must run quarterly fraud-education campaigns in multiple languages and provide 24/7 reporting channels, including toll-free hotlines, email, SMS, USSD services, mobile apps, and verified social-media handles.

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The apex bank warns that failure to comply will attract sanctions, including monetary penalties and administrative consequences for responsible officers.

As digital transactions continue to deepen across Nigeria, the guidelines represent a pivotal regulatory turn, one aimed at balancing innovation with consumer protection, tightening industry discipline, and rebuilding trust in an era where fraudsters are becoming more organised and sophisticated.

Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.

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