The Central Bank of Nigeria (CBN) recently ordered banks in the country to refund charges made on customers’ accounts for daily cash withdrawals or deposits exceeding set limit in the 30 states that full cashless policy transactions has not yet taken place.
Briefing newsmen after the 322 Bankers’ Committee Meeting in Lagos at the weekend, Mr. Kolawole Balogun, who represented the Director, Banking Supervision Department of the CBN, Tokunbo Martins, said the committee was “allowing ample time for the banks to deploy adequate infrastructure needed to support the cashless policy, as well as enable additional sensitisation of various bank customers on the merits of the policy. There are telecommunications, power and other problems that are yet to be addressed.”
The cashless policy has officially taken place in five states: Federal Capital Territory, Abuja, Lagos, Abia, Anambra, Kano, Ogun and Rivers. The CBN has not officially announced the takeoff implementation of full cashless policy in other states, due to some infrastructure bottlenecks.
The apex bank introduced a new policy on cash-based transactions which stipulates a ‘cash handling charge’ on daily cash withdrawals or cash deposits that exceed N150,000 for Individuals and N1,000,000 for Corporate bodies. The new policy on cash-based transactions (withdrawals & deposits) in banks, aims at reducing the amount of physical cash (coins and notes) circulating in the economy, and encouraging more electronic-based transactions.
This is a commendable move by the CBN which is in response to several complaints by bank customers. However laudable this action is, it is not enough unless the apex bank would take further steps to stop other illegal charges by commercial banks and modernise other charges which have continued to multiply by the day and needed to be stopped as soon as possible.
The fact remains that the rate at which banks charge their customers was not in order and should be discouraged.
These charges usually come irrespective of whether you do a transaction in the bank or not. Some banks even charge customers so much for withdrawing money from their accounts.
Some of the charges being complained of by customers include Commission on Turnover, ATM Card maintenance fees, SMS charges and costs on letter of non-indebtedness which many of the commercial banks charge between N, 2000 and N2, 5000.
Illegal deductions such as these, are now a common feature despite series of complaints from many bank customers across the country. While some have been lucky to have their funds returned into their accounts, others continue to lament in vain. For them, it is a refund that might never come.
For instance, banks still charge N4per SMS sent to a customer when even bulk SMS providers in the country offer the service for less than N1.00.
Following a directive by the Central Bank of Nigeria, bank customers began paying N65 for cash withdrawals made on other banks’ ATMs from September 1, 2014. The re-introduction of the charges came almost two years after the CBN and the Deposit Money Banks cancelled the N100 ATM charge in December 2012. According to the apex bank, the charge would become effective on the fourth ATM withdrawal in a month, thus making the first three withdrawals on other banks’ machines within the month free.
However, we align with financial experts who suggest that the N65 deduction should only apply to valid withdrawals. Returned cheque debits, bank-generated charges and loan liquidation transactions ought not to attract Commission On Turnover, COT.
It is trite that by virtue of Section 10, subsection of the defunct Central Bank of Nigeria (CBN) Bankers’ Tariff, a bank is allowed to charge N1,000 for a returned corporate cheque whilst debiting N300 for a returned individual cheque (to be borne by the drawer).
It is also true that by the provision of Section 11, subsection 6 of the subsisting CBN Guide To Bank Charges effective January 01, 2004, a returned cheque attracts 0.5 percent of amount, maximum N5,000 (to be borne by the drawer).
In both cases, the CBN guidelines stipulate that only the drawer of a cheque should be penalised for a returned cheque and not the supposed beneficiary (who never took value for consideration anyway.) Unfortunately, this situation is not true in Nigeria as banks whimsically charge both the drawer and drawee for a returned cheque, thereby amounting to double-jeopardy, especially for the drawee who never took any benefit.
In 2013, the CBN disclosed that it recovered over N9bn excess charges deducted from customers’ accounts by commercial banks across the country within a one year period.
While we urge CBN and commercial banks to be considerate in this matter, we also advise bank customers to be more vigilant in their dealings with financial institutions and always complain whenever they notice any discrepancy on their accounts.


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