In furtherance of its quest to make financial services more accessible and affordable to various stakeholders in the economy, the Central Bank of Nigeria (CBN) has reviewed downward most charges and fees for banking services.
With effect from January 1, 2020, charges on electronic funds transfer, for instance, will attract N10 for transactions below N5,000; N25 for those between N5,001 and N50,000, and just N50 for those above N50,000.
The new Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions was contained in a circular issued by the apex bank on Sunday.
The new guide includes, amongst others, a downward review of charges for electronic banking transactions, removal of Card Maintenance Fee (CAMF) on all cards linked to current accounts, reduction in the amount payable for cash withdrawals from other banks’ Automated Teller Machines (Remote-on-us), review of other bank charges to align with market developments, and inclusion of new sections on accountability/responsibility and a sanction regime to directly address instances of excess, unapproved and/or arbitrary charges.
The new Guide, which replaces the Guide to Charges by Banks and Other Financial Institutions issued in 2017, takes effect from January 1, 2020, and may be reviewed from time to time to reflect changes in the business environment.
The CBN slashed charges on ATM withdrawals (from other banks other than the issuing bank) in Nigeria from N65 to N35 after the third withdrawal within the same month. International withdrawal per transaction – whether debit/credit card – attracts just the exact cost by the international acquirer.
Other reductions include Advance Payment Guarantee (APG) which is now pegged at maximum of 1 percent of the APG value in the first year and 0.5 percent for subsequent years on contingent liabilities.
On debit card charges, the new Guide stipulates that a one-off charge of N1,000 applies to the issuance of cards, 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 lost or damaged cards. In the same vein, upon expiry of existing cards, customers are to pay the same one-off charge of N1,000 irrespective of card type. Conversely, no charge shall be required for pre-paid card loading/unloading.
According to the circular, the current NIP charges apply to use of Unstructured Supplementary Service Data (USSD), purchase with cash-back will attract a charge of N100 per N20,000 subject to cumulative N60,000 daily withdrawal. Also, for cards linked to savings account, a 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.
Furthermore, the CBN said there will be no more charges for reactivation or closure of accounts such as savings, current and domiciliary accounts while status enquiry 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.
On Current Account Maintenance Fee (CAMF), the guide expressly stated that this would be applicable only to current accounts in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. It emphasised that CAMF is not applicable to savings accounts.
Cash deposit under the new cashless policy will attract only 2 percent charge on transactions above N500,000 while cash withdrawal is now 3 percent on transactions above N500,000 for individual accounts. For corporate accounts, cash deposit will attract 3 percent for transactions above N3,000,000 and 5 percent on cash withdrawal transactions above N3,000,000.
As contained in the circular, the CBN is also mandating financial institutions to pay a minimum of 30 percent of Monetary Policy Rate (which is about N4.05 of prevailing rate) on savings accounts as against the current situation where those deposits attract no interests. The new rate is, however, not applicable if a customer makes more than four withdrawals in a month, the CBN said in the detailed circular.
CBN further said, though, that interests on current account in credit balance, term deposit accounts, current and savings on domiciliary accounts, foreign currency deposit shall all be negotiable, but at the instance of the customer.
To guard against excess, unapproved or arbitrary charges by banks and other financial institutions, the Guide stipulates a penalty of N2,000,000 per infraction or as may be determined by the CBN from time to time for financial institutions that breach any provision of the guide. The Guide also emphasised that failure by any bank to comply with CBN’s directive in respect of any infraction shall attract a further penalty of N2,000,000 daily until the directive is complied with or as may be determined by the CBN from time to time.
It therefore directed banks to log every complaint received from their customers into the Consumer Complaints Management System (CCMS) in addition to generating 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, it added, amounts to a breach and is sanctionable with a penalty of N1,000,000 per breach.
The charges prescribed in the Guide were arrived at after extensive consultations with stakeholders and is expected to enhance flexibility, transparency and competition in the Nigerian banking industry, it said.
The CBN urged financial services providers and their customers alike to acquaint themselves with the provisions of the Guide and be properly guided accordingly.
In another circular equally issued on Sunday, the CBN in a new set of rules took a bold step to protect customers of financial institutions from what it called unfair treatment of consumers, in order to enhance confidence in the financial services industry and promote financial stability, growth and innovation.
The Regulations provide minimum standards required of institutions under the regulatory purview of the apex bank on fair treatment of consumers, disclosure and transparency, business conduct, complaints handling and redress in order to protect the rights of consumers and hold the institutions accountable.
To ensure compliance, the CBN announced sanctions for violation of guidelines by institutions, including a penalty of N500,000 which will apply per complaint per week, while the infraction subsists for non-resolution of complaints within prescribed timelines.
Also, non-acknowledgment of complaints from customer or non-issuance of tracking numbers will attract N2 million per complaint while non-response to request or failure to comply with CBN directive will also attract a penalty of N2 million.
For false or non-rendition of returns/reports, the CBN announced a N100,000 penalty and in addition, N10,000 for each day the infraction continues.
It said for persistent breach of regulations, there would be administrative sanctions on responsible officer(s), including issuance of warning letters and any other statutory sanctions on the officer(s) or institution.
“These may be in addition to the sanctions prescribed in this Section of the Regulation,” the CBN said.
“Failure to comply with other provisions of the Regulations not specified above shall attract sanctions provided in the CBN Act, the BOFIA, other enabling laws and regulations,” it said.
It further urged the institutions to, not later than three months after the issuance of the Regulations, develop a policy approved by the Board of Directors that documents the processes, procedures and systems designed to ensure compliance with the provisions of the Regulations.
It said the objectives of the Regulations are specifically to protect consumers from unfair and exploitative practices by Institutions in their dealings with the consumers; unethical and predatory practices that undermine consumer confidence in the use of financial products and services; as well as the provision of inadequate and misleading information and/or failure to disclose material information.
HOPE MOSES-ASHIKE, Lagos, & ONYINYE NWACHUKWU, Abuja
