By Etuka Sunday
The Central Bank of Nigeria (CBN) yesterday reviewed downward most charges and fees for banking services as contained in the new Guide to Charges by Banks, Other Financial, and Non-bank Financial Institutions, with effect from January 1, 2020.
The apex bank among others reduced the amount payable for cash withdrawals from other banks’ Automated Teller Machines, ATM from N65 to N35, after the third withdrawal within one month.
CBN said, the action was in furtherance of its quest to make financial services more accessible and affordable to various stakeholders in the economy.
In a chat with journalists in Abuja on Sunday, Director, Corporate Communications, Central Bank of Nigeria, Isaac Okorafor explained that some of the major highlights of the new Guide to bank charges to include removal of Card Maintenance Fee (CAMF) on all cards linked to current accounts, a maximum of one Naira per mille for customer induced debit transactions to third parties and transfers or lodgments to the customers’ account in other bank on current accounts only, reduction in the amount payable for cash withdrawals from other banks’ Automated Teller Machines (Remote-on-us), as well as from N65 to N35, after the third withdrawal within one month. Other reductions include Advance Payment Guarantee (APG) which is now pegged at maximum of one per cent (1%) of the APG value in the first year and 0.5% for subsequent years on contingent liabilities.
On debit card charges, Mr Okorafor stated that 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.
He further explained that 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, he hinted that 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 emphasized that CAMF is not applicable to Savings Accounts.
According the Director, the CBN carried out the review of the Guide, which also prescribes charges permissible for Other Financial Institutions and non-bank financial institutions, in order to align with market developments.
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 emphasized 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.
This 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 therefore urged financial services providers and their customers alike to acquaint themselves with the provisions of the Guide and be properly guided accordingly.