Bank transfers are an essential aspect of the Nigerian banking system, allowing individuals and businesses to transfer funds from one account to another in a safe and convenient manner. In Nigeria, bank transfers are primarily facilitated through the Nigeria Interbank Settlement Scheme (NIBSS). In this article, we will discuss how bank transfers in Nigeria work using NIBSS as the intermediary.
To begin with, when a customer initiates a bank transfer, the bank moves the money from the customer’s account to NIBSS. NIBSS serves as a clearinghouse for interbank transactions and is responsible for moving money between banks. Once the bank sends the money to NIBSS, it awaits a response from NIBSS.
NIBSS sends two responses back to the bank, one minute apart. The first response lets the bank know if the money has gone through to the receiving bank or not. The second response is a confirmation of the first response. If the money gets to the receiving bank, it will show up in the beneficiary’s account.
On the other hand, if the money doesn’t get to the receiving bank, the bank will automatically reverse the transfer back into the customer’s account. This ensures that the customer’s money is not lost in the event of a failed transaction.
However, there are instances where NIBSS doesn’t provide a definite response as to whether the transfer was successful or not. In such cases, the bank will keep trying to complete or reverse the transfer automatically for up to two hours. If the bank cannot complete or reverse the transfer within two hours, it will queue it for a manual reversal into the customer’s account.
It is important to note that bank transfers in Nigeria are subject to various fees and charges. The fees vary from bank to bank and depend on the amount being transferred, the type of account, and other factors. It is advisable for customers to check with their banks to understand the fees and charges associated with bank transfers.