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| Mallam Sanusi Lamido Sanusi, CBN Governor |
The Central Bank of Nigeria has released a revised guide to Bank Charges which states that deposit money banks (DMB) and discount houses are expected to commence gradual phase out of Commission on Turnover (COT) charges on debit transactions on current accounts. This will begin effective Monday, April 1, 2013.
The charge will drop to N3 from the current charge of N5 on every N1000. It will drop to N2 in 2014 and further to N1 in 2015. It will finally cease by 2016.
This is a welcome development as this charge has been termed an aberration by well meaning Nigerians because Nigeria is one of the only countries that charges a COT charge on debit transactions on current accounts.
The CBN said banks should not charge COT on returned outward clearing cheques, reversal of transactions and all bank induced debits.
The CBN said there will be no charge on debits representing transfer to other accounts in the same name, in the same branch or at another branch of the same bank.
Furthermore, facility restructuring fee in lending is negotiable, subject to a maximum of 0.50 percent on the outstanding amount being restructured (one off charge).
Management fee, which covers processing and appraisal fee (one off charge) is negotiable subject to one percent of the principal amount granted.
According to the CBN, penal rate for late repayment of loan/advances (default or penalty rate) shall attract one percent flat on unpaid installment per month in addition to charging current rate of interest on outstanding debt.
Also the CBN said seven days shall be allowed within which there will be no penal charge on late repayments.
Interest on savings deposits accounts shall attract minimum of 30 percent of Monetary Policy Rate (MPR) per annum.
The Guide to Bank charges, first issued in 2004, was meant to provide a standard for the application of charges in the banking industry, and to minimise conflicts between banks and their customers.
Over time, it was observed that the various charges in the Guide had become out of tune with current realities in the market, and some provisions/terms in it allowed room for ambiguity and conflict.
“In order to reflect current developments in the market and provide clarity, on banking terms, the CBN recently conducted a review of the “Guide” in consultation with all the banks and discount houses, Bankers’ Committee, financial experts/consultants and also considered inputs received from other stakeholders to produce the Revised Guide to Bank Charges.
“To reduce the ambiguity in loan transactions, minimum disclosure requirements for loan contracts have been stipulated. Banks and discount houses are enjoined to ensure compliance with provisions of the Guide,” the apex bank added. The document also stated that for savings deposit accounts, a minimum charge of 30 per cent of Monetary Policy Rate (MPR) would be charged, while for term deposit, the charge is negotiable.
