CBN to fine banks delaying customers’ complaints resolution

… Lenders face N1,000,000 per day fine

The Central Bank of Nigeria (CBN) has issued a strong warning to commercial banks, payment system service providers, and other financial institutions regarding delays in responding to customer complaints. According to a new directive, banks will face a fine of N100,000 per day if they fail to address customer complaints within 72 hours. This directive is aimed at ensuring quicker resolution of issues, particularly those related to Automated Teller Machine (ATM) transactions.

The CBN made it clear that failure to respond to customer or CBN inquiries about ATM-related complaints within the stipulated 72 hours will attract the hefty daily fine. In cases where a customer’s ATM transaction fails and the acquirer does not initiate an automatic reversal, the financial institution will be penalised with a total refund of the disputed amount and an additional fine of N50,000 per day.

This new directive is part of the CBN’s broader 2024/2025 monetary, credit, foreign trade, and exchange policy guidelines, which outline the standards for banks and financial institutions under its supervision. The central bank emphasised its commitment to ensuring that all entities in the payment system comply with established fees and charges, referencing the ‘Guidelines on Operations of Electronic Channels in Nigeria’ from June 2020 and the ‘Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions’ issued in December 2019.

Failure to provide camera footage for disputed ATM transactions will also carry consequences, with the financial institution required to pay a penalty equal to the refunded amount. If an ATM does not have a camera, a bank will face an initial fine of N250,000, followed by a daily charge of N50,000 until a camera is installed.

Regarding interest rates for the 2024/2025 fiscal year, the CBN reiterated that they will remain market-driven, influencing rates indirectly through adjustments to the Monetary Policy Rate (MPR). Banks are expected to comply with several guidelines concerning interest rates on deposits. For current account deposits, interest rates will continue to be negotiable between the customer and the bank. Savings account deposits will similarly follow rates provided in the ‘CBN’s Guide to Charges’ or any future circulars or policies issued by the apex bank.

Special-purpose deposits, such as those held as collateral, will have a minimum interest rate of 30 percent of the MPR for naira-denominated deposits, with foreign currency deposits having negotiable rates. Banks are also expected to calculate interest on loans repayable in installments using the reducing balance method, as the use of other methods like the discount or straight-line methods, which can result in higher interest rates, is not allowed.

In addition, banks must issue monthly account statements free of charge to customers, which must include details of any overdrawn accounts, the amount of interest charged, and all account activities within the month. Savings deposit interest will be calculated daily and credited to customer accounts at the end of each month without any minimum balance requirement for earning interest.

The CBN also stressed that banks must ensure the accuracy of charges and interest payable on deposit accounts. In cases where errors are discovered, such as non-payment or underpayment of interest, excessive interest, or unauthorised charges, the bank is required to refund the customer within two weeks, along with simple interest at the CBN’s prevailing maximum lending rate. Additionally, a letter of apology must be issued to the affected customer, and where necessary, the customer’s account should be reconstructed. Banks failing to comply with this requirement will be subject to further penalties.

For foreign currency-denominated accounts, similar rules apply. In instances where non-payment or underpayment of interest is discovered, banks must refund the affected customer with simple interest at the CBN’s foreign currency lending rate, along with an apology. Again, non-compliance will result in penalties.

This comprehensive set of policies underscores the CBN’s commitment to protecting customer interests and ensuring that financial institutions adhere to best practices in managing customer funds and resolving disputes.