CBN Suspends Charges on Cash Deposits Above Approved Threshold Till April 30

•Reaffirms resilience, soundness of banking sector

James Emejo in Abuja and Nume Ekeghe in Lagos

The Central Bank of Nigeria (CBN) yesterday announced the suspension of processing fees of two per cent and three per cent previously imposed on all cash deposits above N500,000 for individuals and N3 million for corporates respectively, with immediate effect.

This was just as the apex bank further insisted that the Nigerian banking industry remained resilient as key financial soundness indicators were within the regulatory thresholds as captured in the bank’s most recent Economic Report of 2023.

The central bank said the suspension of the processing fees shall remain in effect until April 30, 2024.

The bank disclosed this in a circular dated December 11, 2023, signed by CBN acting Director, Banking Supervision, Dr. Adetona Adedeji, which was addressed to all banks, Other Financial Institutions (OFIs) and non-bank financial institutions under the apex bank’s regulatory supervision.

The central bank further ordered the financial institutions under its purview to accept all cash deposits from the public without any charges going forward.

The development may not be unconnected with the complaints of cash crunch that had reportedly hit the banks as customers prefer to keep their money away from the banks partly because of the exorbitant charges on deposits, especially those exceeding the approved threshold following the implementation of the cashless policy.

On December 20, 2019, the central bank had introduced the revised, “Guide to Charges by Banks, Other Financial Institutions and Non- Bank Financial Institutions,” which had detailed approved charges for banking services.

The document provided a basis for the application of charges on various products and services offered by banks and other regulated institutions under its purview.

The Guide, which was first released in 2004, was revised in 2013 and 2017 in the light of market developments, such as innovations in products and/or channels and new industry participants.

The bank pointed out that the charges prescribed in the guide were arrived at after extensive consultations with stakeholders, adding that the intendment of the guide was to enhance flexibility, transparency, and competition in the Nigerian banking industry.

Hence, where a charge is stipulated as “negotiable”, financial institutions are required to draw the attention of customers to their rights to negotiate and the two parties are required to mutually agree on the applicable charge via a verifiable means.

Although the guide provided for charges on various products and services of financial institutions, it is not exhaustive, the central bank noted.

Financial Institutions are required to present any new product, service, or charge not covered by the document to the CBN for prior written approval.

Sources at the apex bank had also told THISDAY that the scarcity of cash in banks especially during the yuletide season had been a major worry to the apex banking regulator.

Some Nigerians see no reason to keep their money in banks any longer given the current difficulty in withdrawing such funds when needed.

The sources alluded to the fact that the yuletide period was a time when people prefer to keep physical cash for spending purposes – part of the reasons given for the current scarcity.

In effect, Point of Sales (PoS) operators have arbitrarily increased their service charges according to findings by THISDAY.

For instance, most PoS operators in Abuja now charge between N150 and N200 for N5,000 withdrawal instead of the initial N100, blaming the extra fee on the scarcity of naira banknotes from the banks.

Meanwhile, the central bank yesterday, insisted that the Nigerian banking industry remained resilient, maintaining that key financial soundness indicators were within the regulatory thresholds as captured in the bank’s most recent Economic Report of 2023.

CBN acting Director, Corporate Communications, Mrs. Sidi Ali Hakama, stated this in a statement made available to THISDAY.

The assurance by the apex bank spokesperson came against the backdrop of some media reports suggesting that some licenced commercial banks in the country had failed the CBN’s Capital Adequacy Ratio (CAR) for international authorisation.

She said the CBN was engaging with various critical stakeholders to sustain the level of confidence in the Nigerian financial sector.

“We, therefore, appeal to Nigerians to disregard the media reports listing banks as failing the Capital Adequacy Ratio (CAR) stress test for international authorisation as the report did not emanate from the Central Bank of Nigeria (CBN),” the statement added.