You must know these terms if you want to own a bank account in Nigeria

Every industry has its own terms that only members of the profession are conversant with. The banking industry is no exception. However, since their services involve the average man on the street, it becomes important that everybody know the meaning of some of these terms used commonly by bankers. Here is a list of 10 of such terms used in Nigerian banks.

1. Bank alert: This is a text message you get whenever there is a transaction on your account.  An alert is sent to you phone number via a text confirming if you receive payment into your account, withdraw from your account, transfer from your account or change a status on your account.
2. ATM: An acronym for Automated Teller Machines, the ATM is now a household name in Nigerian banking space. For most people, ATM can mean a debit card, the actual machine, or even a POS
3. Current or Savings – If you ever decide to use a local debit or credit car (aka ATM) in Nigeria, you will be asked to explain if it is from a savings or current account. So what you are asked is “current or savings”. They are basically asking you if you have a current or savings account because each debit or ATM card is tied to one.
4. OTP (One-Time Password): This is a set of digits usually communicated from a financial institution (mostly banks) to their customers that is valid for only one login or use. It is used to mainly confirm transactions to a third-party
5. BVN (Bank Verification Number): Already a very common term, the bank verification number is a biometric identification system introduced by the Central Bank of Nigeria in order to reduce illegal financial transactions. Each bank user is given a unique set of 11 digits which is associated with all accounts in all Nigerian banks used by the customer.
6. COT (Commission on Turnover): This is a charge levied customer withdrawals by their banks. This charge has become controversial over the years with the Central Bank of Nigeria removing it in 2016 and reintroducing it earlier this year. It stands at N1 per mille as a current account maintenance fee across all commercial banks.
7. Per mille: Just in case you were getting confused some moments ago, per mille is another acronym commonly used in the banking sector. It means per thousand. Thus, in the COT explained above, banks are allowed to charge N1 per N1000 debit transactions on current accounts.
8. OTC (Over-the-counter): Commonly used in other industries such as pharmaceuticals, over-the-counter in the banking system refers to transactions that can be carried out directly between two parties. In Nigeria, it specifically refers to transactions you can carry out in physical bankimg halls. Most transactions in banking halls are carried out between a bank staff and a client over a counter separating them, hence the term.
9. Token: This is a security device that is used to further secure transactions in Nigeria. The token works by generating security codes used as second factor authentication for transactions. Tokens used to be physical devices worn around the neck but recently, electronic token have gained more popularity. Tokens are usually used to generate OTPs.
10. IFT/LVIFT (Inter-bank Funds Transfer/Large Volume Inter-Bank Funds Transfer): This simply refers to the transfer of funds from one Nigerian bank to another Nigerian bank, subsequent to request and confirmation from a client. However, the client must have an account with the donor bank and know the account number of the recipient. The use of banking applications to carry out IFTs is now very common in the country. Depending on the volume of cash involved in the transfer, it may be considered as a LVIFT
11. LMT (Local Money Transfer): This is a form of IFT, usually carried out in physical banking halls. Here, a client enters the banking hall of a bank he has an account with and requests for a LMT form. Upon filling and verification from the bank, the requested funds are transferred from the client’
12. KYC (Know Your Customer): This is a policy of the Central Bank which seeks to promote financial inclusion and improve financial services offered by banks. Under the policy, regulations were amended to allow many more people use financial institutions.
13. e-Banking (Internet Banking): This is a process whereby a client has access to the majority of transactions carried out in a banking hall on the Internet. As such, fewer clients use the banking hall, reducing congestion and improving ease of transactions. Usually, clients are given usernames and passwords which enable them access their accounts on the website of their banks. There, clients can carry out several transactions ranging from funds transfers to buying movie tickets.