Many people in the fintech space believe that NIBSS uses money that settlement banks have with CBN to facilitate #payments. NIBSS/NIP is not directly involved in 'moving' money.
When a customer (sender) initiates a transaction, the debiting bank debits the #customer after they have confirmed a transaction is successful (the FTDebit method is successful - 00 Response). This is after Name Enquiry is successful (account name confirmation).
The crediting bank gets the corresponding FTCredit request and then double-checks using the TSQ method. Once the TSQ method responds favourably, they [crediting bank] then credit their #customer (receiver) with the exact amount in the response body from the method(s).
How does the crediting bank get their #money? NIBSS collates all the inflows and outflows for each bank on a daily basis and runs a deduction to get the net value of transactions per bank.
These net values are communicated to CBN via a secured channel. Every bank's position with the CBN is updated with the net values from NIBSS, by the CBN
This is a high-level explanation of how A2A transfers and subsequent #settlements work on NIP. Some extra steps were skipped to achieve brevity.
To conclude:
NIBSS does not move money in NIP #transactions.
NIP is a messaging API between banks, for the purpose of transmitting financial transaction (FT) instructions.
NIBSS does not directly update bank positions with the CBN. The CBN does the updates to bank(s) positions.