Banks may lose 43% transfer fees

To check erratic and multiple charges in banks, a new guide, which has been exposed to stakeholders for input, has slashed the electronic transfer fees by 42.8 per cent to N60, against N105.

According to the exposure draft of the guide signed by the Director, Financial Policy and Regulation Department of the Central Bank of Nigeria (CBN) CBN, Kelvin Amugo, the said amount will apply to transfers that are below N10 million, while N300 should be charged on any transfer above N10 million, which represents a good deal for bank customers with high network transfers.

This guide to charges for banks, which replaces the earlier version issued in 2013, would take effect at a later date, possibly this year, after due consultations during the exposure, and may be reviewed from time to time to reflect changes in the business environment.

The online, mobile and over-the-counter transfer charge at N105 per transaction has become huge opportunity for banks to raise millions of Naira on daily basis for the sector, especially with the adoption of various electronic payment channels. However, the naira debit card, mostly used by customers on savings account and mistakenly called “ATM Card”, will now attract a monthly maintenance charge of N50, while its acquisition is pegged at N1000 one-off charge. Perhaps for the first, the guide makes it clear the number of monthly withdrawals in savings account by customers to remain eligible for interest rate, pegging it at four.

The lack of knowledge, which has tended towards top secret by banks, has as well been an avenue for banks to use customers’ huge deposit in savings for free, since many do not know the limit and are disqualified on monthly basis. However, interest on savings account products has remained at a minimum of 30 per cent of the existing Monetary Policy Rate (currently 11 per cent), which means that customers who do not withdraw more than four times in a month are entitled to 3.3 per cent interest on savings balance.

In recent months, banks in the country, hit by the implementation of the Treasury Single Account (TSA), reduced interest rate and the zero Commission on Turnover (CoT) and resorted to multiple charges on customers’ accounts. There were about 10 charges associated with banking activities, which are currently raising concerns among customers of banks.

The charges, in no particular order, include the maintenance fees which banks are now charging on monthly basis on current accounts, and the Value Added Tax on virtually every charge against customer, including the charges on SMS alert.