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How Debt Could Affect Bank Alerts for Some Customers
How Debt Could Affect Bank Alerts for Some Customers
Barring any changes, customers of nine banks in Nigeria may be unable to receive alerts and perform banking transactions using their mobile phones starting January 27, 2025. This is because telecommunications operators have been authorized to disconnect the Unstructured Supplementary Service Data (USSD) codes assigned to these financial institutions due to a debt of N200 billion..
This directive was given by the Nigerian Communications Commission (NCC) in a public notice yesterday, signed by the Commission’s Director of Public Affairs, Reuben Muoka, reports Daily Independent.
The NCC said affected banks must settle their outstanding obligations by January 27, 2025, or risk losing access to their USSD codes.
These codes, essential for enabling mobile banking services, could be reassigned to other applicants if the debts remain unresolved.
Originally designed by telecom operators for services like airtime purchases and subscriptions, USSD has become a key tool in the banking sector, offering financial services to users without requiring an Internet connection.
The commission revealed that, as of Tuesday’s (January 14, 2025) close of business, nine out of 18 financial institutions had not complied with regulatory directives.
While other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.
However, the regulator did not disclose the precise debt currently owed by the affected banks.
According to the NCC, some of the unpaid invoices have remained unpaid since 2020, indicating a prolonged financial dispute between the banks and telecom operators.
Part of the notice reads, “By the information made available to the commission as at close of business on Tuesday, January 14, 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the second joint circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020.”
The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.
It added, “In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”
The affected financial institutions include United Bank for Africa Plc, Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, Wema Bank Plc, and other two financial institutions.
The affected USSD codes include 770, 919, 822, 329, 773, 833, 7799, 945 and 966.
The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.
This development highlighted ongoing tensions between telecommunications companies and financial institutions over unpaid USSD-related debts, a challenge that has persisted for years.
Earlier in the week, NCC had promised to issue a notice with the names of the erring banks, preparing bank customers to seek alternatives during the suspension period.
USSD is a crucial payment gateway for many Nigerians.
During the 20th anniversary of the telecoms sector in 2021, the then Group Managing Director of Zenith Bank Plc, Mr. Ebenezer Onyeagwu, said, “The introduction of USSD changed everything. Without telecoms infrastructure, there is no USSD code.”
The value of USSD transactions between January and June 2024 was N2.19 trillion.
However, this is a 54.75 percent decline from N4.84 trillion in the same period of 2023, with more Nigerians increasingly favouring internet transfers.
In a December 20 memo, the CBN and NCC gave banks a December 31, 2024, deadline to pay 85 percent of all outstanding invoices (from February 2022)- a mandate that has been ignored by many of the banks.
