CBN Reduced Bank Charges to Pacify Customers, Says Emefiele

CBN Governor, Mr. Godwin Emefiele

•ATM withdrawal, electronic banking, card maintenance charges, others slashed

Obinna Chima

The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, yesterday explained that the banking sector regulator decided to review downward bank charges to ameliorate the pains of customers.

Emefiele said this while speaking in a telephone interview with THISDAY on the new circular titled ‘Guide to Charges by Banks, Other Financial, and Non-bank Financial Institutions,’ which becomes effective from January 1, 2020.

The circular posted on the apex bank’s website yesterday, amongst others, announced the downward review of charges for electronic banking transactions; review of other bank charges to align with market development and the inclusion of new sections on accountability/responsibility and a sanction regime to directly address instances of excess, unapproved or arbitrary charges.

Some of the major highlights of the new Guide to Bank Charges include the removal of Card Maintenance Fee (CAMF) on all cards linked to current accounts, a maximum of N1 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 of the APG value in the first year and 0.5 per cent for subsequent years on contingent liabilities.

Also, for cards linked to savings account, the 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, 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 stated that CAMF was not applicable to Savings Accounts.

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 stipulated 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.
According to the regulation, failure to log and provide the code amounts to a breach and is sanctionable with a penalty of N1,000,000 per breach.

Shedding more light on the new bank charges, Emefiele said: “The CBN has been receiving commentaries by bank customers about bank charges. Normally, these charges are reviewed every five years. But this time, we decided that in order to assuage the feelings of bank customers, that we should review downward some charges. Like you can see, the various charges that have been reviewed, that would be published from Monday (today), you will find that we have taken into consideration, the interest of bank customers and we would continue to review this.

“Where we find out that there are pains being borne by bank customers, we would try as much as possible to ameliorate such pains, so that banks are not seen to be extorting the customers in unfair manners.”

Also, the Director, Corporate Communications, CBN, Mr. Isaac Okorafor, explained that the move was in furtherance of the central bank’s quest to make financial services more accessible and affordable to various stakeholders in the economy.

On debit card charges, 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 said.

He further explained that the current NIBSS Instant Payment (NIP) charges apply to use of Unstructured Supplementary Service Data (USSD), saying purchase with cash-back would attract a charge of N100 per N20,000 subject to cumulative N60,000 daily withdrawals.

According him, 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.

“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,” he added.

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.
“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,” he said.