The Central Bank of Nigeria (CBN) has slashed withdrawal fees usually charged after the third withdrawal from Automated Teller Machines within the same month.
In a new directive contained in the new Guide to Bank Charges released on Sunday, the CBN stated that the withdrawal fee charged for the use of other banks’ Automated Teller Machines (ATM) has been reduced to N35, from N65 earlier charged.
Also, card maintenance fee has been reviewed to N50 every three month (quarterly), from the initial monthly period. The guide released by the CBN contains major changes on electronic transactions’ charges in Nigeria.
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According to CBN, the guide which was first released in 2004 (revised 2013 and 2017), has been reviewed again due to recent market development such as innovations in products and/or channels and new industry participants.
CBN reviews major E-transaction charges
As earlier mentioned, the CBN has done a downward review of charges applicable to withdrawal from other ATMs from N65 to N35, effective from January 1 2020. Meanwhile, other major reviews done by the CBN on electronic banking include:
- The cost to either obtain a new hardware token or a replacement is reduced from N3,500 to N2,500.
- Bills Payment (Including Bills Payment through other E-channels) has been reduced to a maximum of N500 (negotiable) per beneficiary from N1,200.
- Charges on electronic funds transfer have been reviewed to N10 on transaction below N5,000, N25 on transaction between N5,001 – N50,000 and N50 on transaction above N50,000.
- Charges on foreign currency denominated debit/credit card have been reduced to $10 per annum from $20 per annum.
- Also, Card Maintenance Fee on Naira debit/credit cards is reviewed to N50 every three months (quarterly), from the initial N50 monthly.
- However, transactions’ alert on consumer-induced transactions remain (N4), while no charge for bank-induced transactions.
- The CBN also removed Card Maintenance Fee on all cards linked to current accounts and also instructed banks to charge a maximum of N1 per mille for customer induced debit transactions to third parties, and transfers or lodgments to the customers’ account in other banks on current accounts only.
Banks to pay N2 million on any breach
Following the new directives, the CBN stated that any Financial Institution that breaches any of the provisions as contained in the new guide will pay a penalty of N2 million per infraction or as may be determined by the CBN from time to time.
The sanctions partly read:
“Financial Institutions are to note that any breach of the provisions of this Guide carries a penalty of N2,000,000 per infraction or as may be determined by the CBN from time to time.
“Failure 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.
“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.”
What it means: The latest review of major electronic transactions’ charges came against the backdrop of numerous complaints from Nigerians over the exuberant and severance charges by Bank.
Nairametrics recently reported that Guaranty Trust Bank (GTB), United Bank of Africa (UBA), and other eight banks earned a whopping N135.15 billion between January and September 2019 from electronic transactions’ charges.
A look into the unaudited 2019 third-quarter reports of the banks, showed that their revenue from electronic transactions grew by 57% as against the N86.312 billion they earned from the first 10 months of 2018.
In the meantime, Banks’ customers would heave a sigh of relief from the latest review. Also, the downward review of charges may further drive the Central Bank of Nigeria’s financial inclusion drive.
Download CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions
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