CBN reviews bank charges, to phase out COT by 2016

Nine years after, the Central Bank of Nigeria (CBN), on Thursday published a revised guide to bank charges first issued in 2004 to provide standard application of charges in the industry, while minimizing bank-customer conflicts. The review undertaken with imputes from stakeholders including members of the Bankers’ Committee, the apex bank said in a circular by IT Nwaoha, acting director, Financial Policy and Regulation Department, became necessary “in order to reflect current developments in the market and provide clarity on banking terms.” Among others, the document approves, with effects from Monday, April 1, 2013, a N100 annual debit card maintenance charge; while hinting of a gradual phase-out of commission on turnover from this year, until 2016 when it customers’ accounts will no longer be debited for transactions on current accounts. For now, banks are to charge no more than “N3 per mille” this year as COT; N2 in 2014; and N1 in 2015; before moving to zero COT from 2016, the CBN said in the document. In addition, “the banks should not charge COT on returned outward clearing cheques, reversal of transactions and all bank-induced debts.” There will also 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,” while customers will pay cost, plus stamp duties for cheque books, and N200 per leaflet for counter cheques. Also, the CBN hopes to discourage third-party cheque indemnities, while it is negotiable for non-clearing financial institutions like micro finance banks, just as bank guarantees are negotiable, but subject to a maximum 2 per cent one-off charge. For internet banking transactions, the CBN recommends for example, a maximum N1,500 one-off charge for token; N100 for bills payment and interbank transfers; as well as N70 charge for all electronic fund transfers below N500,000; N100 for funds between N500,000 and N10 million; and N500 for funds above N10 million. Still ATM transactions, transactions on approved independent ATMs will cost N150; interbank funds transfer, N100, just like intra-bank funds transfer, and bill payment. Where a cheque is returned for reasons other than being unfunded, there will be no charge, while 0.5 per cent of cheque value, maximum N5,000 is to be borne by the drawer, without prejudice to the dud cheque act. In the preface to the document, the CBN warns that “where a charge is stipulated as ‘negotiable,’ (banks) are required to appropriately draw the attention of their customers to its consequence and the two parties should mutually agree on the applicable charge.” All commissions, charges and rate stipulated in the guide are also subject to relevant taxes, while the apex bank mandates banks to present any new product, service and charges not covered by the guide for prior approval.     [Daily Independent]