Why we cut bank charges, by CBN
• New regime begins January 1
• Imposes N2m fine per infraction
• Urges customers to know rights
The Central Bank of Nigeria (CBN) yesterday reduced all bank charges, with some getting more than 50 per cent cut, with effect from January 1, 2020.
According to the apex bank, the decision, which came amid public outcry against multiplicity and value of the charges, is aimed at making financial services more accessible and affordable to various stakeholders in the economy.
The reviewed charges and fees for banking services are contained in the new “Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions,” which now supersedes the 2017 version.
The CBN said the new charges were “arrived at after extensive consultations with stakeholders and the action is expected to enhance flexibility, transparency, and competition in the Nigerian banking industry.”
The guide stipulates a penalty of N2million per infraction or as may be determined by the CBN as a guard against excess, unapproved or arbitrary charges by banks and other financial institutions.
Besides, failure by any bank to comply with the CBN’s directive in respect of any infraction shall also attract a further penalty of N2million daily or as may be determined by the apex bank, until the directive is complied with.
To emphasise the seriousness of the new rule, the Director of Corporate Communications Department, CBN, Isaac Okorafor, said the banks had been directed to henceforth log every complaint received from their customers into the Consumer Complaints Management System (CCMS).
Additionally, they are to generate a unique reference code for each complaint lodged, which must be given to the customer.
“Failure to log and provide the code to the customer amounts to a breach and is sanctionable with a penalty of N1million per breach,” he said.
According to him, “this is the time financial services providers and their customers alike have to acquaint themselves with the provisions of the guide and be guided accordingly.”
Specifically, for cards linked to a savings account, the maintenance fee has been reduced to a maximum of N50 per quarter from N50 per month amounting to only N200 per annum instead of N600.
The guide has removed Card Maintenance Fee (CAMF) on all cards linked to current accounts. It also pegged a maximum of N1 per mile for customer-induced debit transactions on current accounts to third parties and transfers or lodgments to the customers’ current accounts in other banks.
There is now a reduction in the amount payable for cash withdrawals from other banks’ Automated Teller Machines (ATMs), known as Remote-on-Us, from N65 to N35.
Other reductions include Advance Payment Guarantee (APG), which is now pegged at a maximum of one per cent of the APG value in the first year and 0.5 per cent for subsequent years on contingent liabilities.
For all debit cards, a one-off charge at N1,000 applies to the issuance, irrespective of card type- regular or premium. The same one-off charge of N1,000 applies for the replacement of debit cards at the customer’s instance for loss, damage or expiry. Conversely, no charge shall be required for pre-paid card loading/unloading.
Okorafor explained that the current NIBSS Instant Payment charges applied to the use of Unstructured Supplementary Service Data (USSD), as purchase with cash-back will attract a charge of N100 per N20,000, subject to cumulative N60,000 daily withdrawal.
“There will be no more charges for reactivation or closure of accounts such as savings, current and domiciliary accounts, while status inquiry at the request of the customer (like confirmation letter, letter of non-indebtedness and reference letter) will now attract a fee of N500 per request.
“CBN carried out the review of the guide, which also prescribes charges permissible for other financial institutions and non-bank financial institutions, to align with market developments,” he added.
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