The Central Bank of Nigeria (CBN) has again moved to ensure more transparency in tariffs collected by power Distribution Companies (Discos) in the country, with a directive to all banks to disclose all accounts operated by the power distributors to the six guarantee financial institutions.
In an official communication with the affected banks dated September 16, and referenced BSD/DIR/G EN/LAB/13/064, the apex bank instructed that the guarantee banks should be availed all accounts maintained by the Discos, jointly, individually or through their agents.
The memo was signed by the Director Of Banking Supervision, at the apex bank, Bello Hassan on behalf of the CBN.
In August, the CBN had taken over tariff collection from electricity distribution companies, noting that it would improve payment discipline in the industry.
It directed that henceforth, payment or settlement of all electricity related goods or services shall be made through the Nigerian banking system, whether cash or cashless and shall only be performed by deposit money banks (DMBs).
It further warned that any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any Disco without appropriate authorisation shall have regulatory actions imposed on it.
Collection efficiency by the Discos has always been an issue in the electricity industry, with questions over whether the power distributors make full disclosure to the other players in the sector, including Generation Companies (Gencos) whose operations depend on remittances from the Discos.
In its latest quarterly report, the Nigerian Electricity Regulatory Commission (NERC), had also indicated that poor collection by the Discos had continued to adversely impact the financial liquidity of the industry.
In the apex bank’s letter to the banks obtained yesterday, the CBN recalled that to improve the market efficiency, it had directed the deposit banks that provided the guarantees on behalf of Discos to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operators (MO) to take full responsibility for all collections for energy/non-energy services and remittances.
“Consequent upon the above, you are hereby directed to disclose to these BG banks, all accounts that you currently maintain for all the Discos. This will also include all accounts in the joint names of these Discos or those that you maintain for any collection agent for which the Discos are the beneficiaries.
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