N250bn debt: NCC orders telcos to disconnect USSD codes of 9 defaulting banks by Jan 27

The Nigerian Communications Commission, NCC, has authorised telecom operators like MTN, Airtel and Glo to disconnect the Unstructured Supplementary Service Data (USSD) codes of nine banks that are yet to pay their USSD debts. The approval was disclosed in a public notice signed by the Director of Public Affairs of the Commission, Reuben Muoka.

The commission pointed out that as of the close of business on Tuesday, January 14, 2025, nine out of 18 financial institutions had not complied with regulatory directives. The nine defaulting banks include Fidelity Bank Plc with the 770 USSD code, First City Monument Bank (*329#), Jaiz Bank Plc (*773), and Polaris Bank Limited (*833#).

Others are Sterling Bank Limited (*822#), United Bank for Africa Plc (*919#), Unity Bank Plc (*7799#), Wema Bank Plc (*945#), and Zenith Bank Plc (*966#).

“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,” part of the NCC’s notice read.

The commission also warned the defaulting banks to settle their outstanding obligations by January 27, 2025, or risk losing access to their USSD codes.

Banks N250 billion USSD debt

This development is coming following years of dispute between financial institutions and telecom operators over the N250bn debts owed by banks in the form of USSD code service charges. Originally designed by telecom operators for services like airtime purchases and subscriptions, USSD has since become a major financial inclusion tool in the banking sector. This is because they offer financial services to users without requiring an Internet connection, a feature overly important given Nigeria’s low internet and smartphone penetration.

For the past few months, mobile operators have intensified their clamour over the unpaid debt, stressing its effect on their businesses. They also threatened to shut down USSD services due to incurring losses, a move that was halted following interventions by government authorities.

However, in November, the operators reported some progress in the repayment of the N250 billion debt. According to the Association of Licensed Telecom Operators of Nigeria (ALTON), smaller banks started the process of clearing their debts, while tier-one lenders who take a larger share were yet to make a tangible mark.  

Gbenga Adebayo, the ALTON Chairman expressed that although some repayments have been recorded but still fall below expectations. “We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming. We are now waiting for intervention from regulators, including the Central Bank of Nigeria and the Nigerian Communications Commission, to resolve the issue,” he said.

This prompted the NCC with the Central Bank of Nigeria, CBN, to issue a final notice on the matter. In the notice issued on December 20, both regulators outlined a new payment procedure and operational guidelines for commercial banks to follow when clearing the debts. 

Per the procedure, 60 per cent of the debts incurred before the implementation of Application Programming Interfaces in February 2022 must be paid as a full and final settlement. The payment must be finalized by January 2, 2025, with full settlement due by July 2, 2025.

In addition, the agencies stressed that 85 per cent of USSD debts that accumulated after February 2022 in terms of their outstanding invoices must be paid by December 31, 2024. Commercial banks are to also ensure that 85 per cent of future invoices are settled within one month of issuance.

However, it seems the big financial institutions are still unperturbed as a look at the list of defaulters shows they are majorly Tier 1 players. While the NCC did not disclose the precise debt currently owed by the affected banks, it noted that some of the unpaid invoices have remained unpaid since 2020, indicating a prolonged financial dispute between the banks and telecom operators.

The commission also noted that banks’ failure to comply with the CBN-NCC joint circular means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.

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.

“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 notice reads.

See also: N250bn ussd debt: CBN, NCC issue final notice on telecom operators and banks dispute