Regulatory Alerts2013-10-08 | BPS/DIR/GEN/01/029Frequently Asked Questions on Direct Debit Scheme
Direct debit is a convenient way for individuals and businesses to pay recurring bills or membership fees electronically. Here are some key points about direct debits in Nigeria: 1. Banks are obliged to support the Direct Debit Scheme. 2. Only licensed banks can act as originators/billers, and only customers of such banks can be payers under a direct debit arrangement. 3. Customers must provide a written mandate authorizing the collection of funds from their account on specified dates. 4. A minimum notice period of 14 working days is required for cancellation of a direct debit instruction. 5. Errors in payment amounts are subject to immediate refund by the bank. 6. Unpaid direct debits must be returned within the local clearing cycle, and applicable penalties apply if not. 7. The payer's account should have sufficient funds at the time of collection. Insufficient funds will result in a failed transaction and potential penalties. 8. Payment details are reflected in account statements, and notification is provided via email/SMS. 9. The direct debit payment date is generally specified in the mandate or executed on the next business day if it falls on a weekend/public holiday. 10. For more information about direct debits, visit the Central Bank of Nigeria's website at www.cbn.gov.ng.