The Central Bank of Nigeria’s Directive on Transaction Charges

The Central Bank of Nigeria (CBN) has announced downward review of bank charges on consumer services. A statement from the Apex Bank on Sunday explained that the review has become necessary to encourage financial inclusion and ease the burden of arbitrary charges that have been on the shoulders of bank customers for long.

The statement reads:

“In a bid to encourage financial inclusion and to reduce the burden of bank charges on consumers of financial service. CBN has issued a revised Guide to Charges by Banks, Other Financial and Non-Bank Financial institutions in response to the evolution in the financial industry over the last few years. CBN new guide includes, amongst others; downward review of charges for electronic banking transactions.

“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 revised Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions takes effect on January 1, 2020.”

The review affected many of the banks’ charges while others remain the same. Among the items that were reviewed downward is the hardware token that is reduced from N3500 to N2500, for electronic transfers: transactions below N500 incur charge of N10 only, N5,001 – N50, 000 attracts N25, while transactions above N50, 000 is at the charge of N50 only.

While cards linked to current accounts are debit charges free, cards linked to savings accounts attracts maximum of N50 quarterly maintenance fee and N35 after the third withdrawal within the same month.

However, the cashless policy remains unchanged. Individual Cash deposit transactions above N500, 000 still at 2% charge, cash withdrawal above the N500, 000 in the same category is charged at 3%. For corporate bodies, cash deposits above N3,000,000 bears 3% charge and cash withdrawal above N3,000,000 attracts 5% charge.

CBN concluded by sounding a warning of consequences to banks and other financial organizations that flout any of these directives or manipulate the system to exploit consumers.

“Financial Institutions are to note that any breach of the provisions of this Guide carries a

penalty of N 2,000,000 per infraction or as may be determined by the CBN from time to

time.

1. Where a bank is found to have wrongfully imposed a particular charge on its customers,

the provision of Section (i) above shall apply for the charge on each customer.

iii. Failure to comply with CBNâ??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.

1. Banks are required to log every complaint received from their customers into the

Consumer Complaints Management System (CCMS) and must 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 N1,000,000 per breach.

1. A penalty of N100,000 shall be imposed on a financial institution that contravenes the

provisions of Part 6C.”

For long, Nigerians have been crying over the number of charges imposed on banks’ transactions, from ATM withdrawal to card maintenance to USSD fees.

It appears the outcry instigated the recent changes in the directive of the Apex Bank. While this is a welcome development, it is not enough to put the outcry to permanent rest.

Moreover, Nigerian banks are notorious for breaking rules as long as they serve for their gains. Although CBN also stipulated there would be consequences in case the rules are broken, affecting the punishment is always the challenge.

The Apex Bank did not provide a window for consumer complaints, which always creates the impunity that the banks bask on to impose their arbitrary charges. And consumers watch helplessly as their hard earned money get swayed. For instance, the proposed fine of N10, 000 for failed ATM transactions that are not reversed within 24 hours has not stopped people from losing their money to the banks therefore. And apart from calling their banks to reverse the fund, many don’t know how else to recover it.

So, the Regulator should provide a complaint unit that will handle cases of disregard of its directives and render justice to aggrieved customers. It only takes that, and the banks will sit up.