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Financial Services
Senate investigates Nigerian banks over ATM, SMS, and maintenance charges
The Senate is set to investigate alleged illicit and excess bank charges by commercial banks operating in the country.
Sequel to increasing complaints by several bank customers over alleged high charges and exploitation by Nigerian banks, the Nigerian senate has taken a pragmatic step towards addressing the issue.
In response to the perceived need of addressing the highlighted challenges capable of limiting the quest to achieve a financially inclusive economy, Senator Patrick Moro moved a motion to address these complaints. In response, the Senate urged its Committee on Banking, Insurance, and Other Financial Institutions to investigate the alleged illicit and excess bank charges by commercial banks operating in the country.
READ ALSO: CBN knocks airline and shipping firms over non-compliance with form NXP
Explore Data on the Nairametrics Research Website
In addition, it also asked the CBN to address the complaints and downwardly review the charges on all bank accounts, as a panacea to the alleged exploitations.
Senator Moro emphasized that the alleged exploitation ranges from; constant charges and deductions from bank SMS charges, intra-bank transfer charges in the sum of N52.59, ATM card renewal charges, and account maintenance charges in the sum of N93.13.
(READ MORE: World Bank President says debt cancellation needed to help poorest countries)
Commenting on the motive behind his motion, Moro remarked that, “These charges being deducted from customers’ accounts by banks, have caused an uproar within the public as Nigerians have expressed their dissatisfaction and displeasure over such excessive deductions, which they feel are fraudulent and targeted at further impoverishing Nigerians.”
He recalled that in April 2017, the CBN revised the card maintenance charges in the new guide released, from N100 annually to N50 monthly.
READ: Poor service: 19,977 subscribers lodge complaints against Telcos
He continued, “Thus, bank customers in Nigeria will pay not less than N1.46bn to banks as card maintenance charges every month, totaling about N17.54bn in a year.
“Nigerian banks in a bid to further extort customers have set most of their ATM machines to dispense cash below the maximum sum of N40,000 that ATMs are programmed to dispense per transaction.
READ MORE: CBN slashes ATM withdrawal fee, others, imposes N2 million fine on Banks
“The customers using the ATMs do not have a choice than to withdraw much lesser amounts per transaction; thereby, incurring the additional cost of N65 per transaction after using another bank’s ATM machines beyond three times.”
Recall that Nairametrics in an earlier article disclosed that CBN had recovered on behalf of customers over N60 billion excessive charges imposed on them by defaulting banks.
Debt Securities
Interest rates will remain low until the end of H1 2021 – Meristem Securities
Meristem Securities has argued that interest rates will remain low until, at least, the end of H1 2021.
Meristem Securities has asserted that interest rates will remain low until, at least, the end of H1 2021.
This statement was made at the recently held webinar on Global Economy and Outlook, which the company themed: Bracing for a Different Future.
Although the company acknowledged that there is mounting pressure for upward movement in yields from several stakeholders, it appears the company concurs nothing concrete is in sight.
This line of reasoning seems to have influenced their decision to advise investors to move away from Treasury instruments.
What they are saying
Meristem advises that:
- “Buy and hold strategy investors seeking to generate above average returns should move away from risk free Treasury instruments and focus on investment grade commercial papers and bonds which satisfy investment objectives.”
- “Active traders with higher risk appetite are advised to focus on high-yield short duration instruments, which would be re-invested into a higher yield environment should rate reversals occur.”
The advice regarding shunning Treasury instruments appears to be in order, considering that treasury bill rate has been declining, with the latest figure — November 2020 — 0.03% as per the CBN monthly interest rate data.
Further checks from the Debt Management Office website, indicates that the latest figures for Eurobonds and Diaspora bond fall short of the fixed yield at issue for all the different categories of bonds in issue.
What you should know
Latest figures from the CBN’s monthly interest rate indicate that:
- Treasury bill rate has been on a steady decline for six months, down to 0.03% since the last rise (2.47%) in May 2020.
- Fixed deposit rates (one, three, six and twelve months) have also been declining – the latest figures for these indicate that in November 2020, one-month deposit rate was 1.92%, 2.9% for three months, 2.84% for six months, and 4.89% for 12 months.
- Compared with the corresponding period in 2019, the figures indicate that these rates fell by 75%, 66%, 71% and 49% respectively.
Financial Services
CBN issues framework for QR payments
CBN has issued a framework that would guide Quick response (QR) code payments in Nigeria.
The Central Bank of Nigeria has issued the framework that would guide Quick Response (QR) Code Payments in Nigeria.
This is a proactive move by the Apex bank towards ensuring the safety and stability of the Nigerian Financial System, as well as promoting the use and adoption of electronic payments and foster innovation in the payments system.
READ: Over 1 million people took loans from banks below 20% interest rate in 1 year- CBN
Quick Response (QR) Codes are matrix barcodes representing information presented as square grids, made up of black squares against a contrasting background that can be scanned by an imaging device, processed and transmitted by appropriate technology.
The codes are used to present, capture and transmit payments information across payments infrastructure and further enable the mobile channel to facilitate payments and present another avenue for promoting electronic payments for micro and small enterprises.
READ: Binance offers DeFi coders $100,000; DeFi market value hits $8 billion
What you should know
- Quick Response (QR) codes are two-dimensional bar codes. QR code payments allow merchants to receive payments from customers simply by scanning generated QR codes using a smartphone camera. The QR code payments carry the purchase transaction information to the mobile device of the buyer/customer.
- Making payments via QR codes is very secure. It is because the QR code is nothing but just a tool that is used to exchange information. Any data which is transferred via QR codes is encrypted, thus making the payment secure.
- The Participants in QR Code Payment in Nigeria include Merchants, Customers, Issuers (Banks, MMOs and Other Financial Institutions), Acquirers (Banks, MMOs and Other Financial Institutions) and Payments Service Providers.
- QR payments are increasingly becoming a popular means of payments in Nigeria, and some industry players would see the framework as a perfect way of regulating the sector.
- QR codes are capable of storing lots of data. But no matter how much they contain, when scanned, the QR code should allow the user to access information instantly. It can be used for payments, sharing contacts and Wi-Fi passwords and lots more.
- The popular and common argument is that since POS machines are expensive, cheaper options such as QR scanners should be pushed forward to local traders.
READ: Telecoms, FSI to hugely boost Nigerian Economy in 2021 – CWG’s Business Director
Financial Services
CBN unveils framework for regulatory sandbox operations
CBN has issued a regulatory Sandbox framework towards engaging with the operators in the Fintech space.
