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CBN scraps card maintenance fee, slashes bank charges in new banking guidelines

For cards linked to a savings account, a maintenance fee has been reduced to a maximum of N50 per quarter from N50 per month amounting to only N200 per annum instead of N600.


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CBN slashes bank charges

Starting from January 1, 2020, your bank will no longer deduct a monthly N50 card maintenance fee on your current account.

This is according to a new directive of the Central Bank of Nigeria, CBN on Sunday, which announced a new regime of rates.

Other banking charges reviewed by the apex bank include the Automated Teller Machines, ATMs charge which has been slashed to N35 for cash withdrawal from other banks’ ATM instead of the N65 that currently applies after the third withdrawal within a month.

According to the CBN directive signed by Chibuzo Efobi, on behalf of the CBN Director, Finance Policy and Regulation Department, banks that fail to comply with the guidelines are to be sanctioned.

Other major highlights of the new policy include: a maximum of N1 per mille for customer induced debit transactions to third parties and transfers or lodgments to the customers’ account in other bank on current accounts only and cut in Advance Payment Guarantee (APG) now pegged at maximum of one per cent of the APG value in the first year and 0.5 per cent for subsequent years on contingent liabilities.

Also, read 5 Takeaways From CBN’s Monetary Policy Strategy

On debit card charges, the new guideline stipulates that a one-off charge of N1, 000 applies to the issuance of cards, irrespective of card type (regular or premium).

The same one-off charge of N1,000 applies for the replacement of debit cards at the customer’s instance for lost or damaged cards. In the same vein, upon expiry of existing cards, customers are to pay the same one-off charge of N1, 000 irrespective of card type. However, no charge shall be required for pre-paid card loading/unloading.

According to the policy, the current NIP charges apply to use of Unstructured Supplementary Service Data (USSD), purchase with cash-back will attract a charge of N100 per N20, 000 subject to cumulative N60, 000 daily withdrawal.

Also, for cards linked to a savings account, a maintenance fee has been reduced to a maximum of N50 per quarter from N50 per month amounting to only N200 per annum instead of N600.

Besides, there will be no more charges for reactivation or closure of accounts such as savings, current and domiciliary accounts while status enquiry at the request of the customer (like confirmation letter, letter of non-indebtedness and reference letter) will now attract a fee of N500 per request.

On current account maintenance fee, the guideline said this would be applicable only to current accounts in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. It prohibits CAMF on savings accounts.

It also prescribes charges permissible for Other Financial Institutions and non-bank financial institutions, in order to align with market developments.

The guideline states: “To guard against excess, unapproved or arbitrary charges by banks and other financial institutions, the guide stipulates a penalty of N2,000,000 per infraction or as may be determined by the CBN from time to time for financial institutions that breach any provision of the guide.

“The guide also emphasized that failure by any bank 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.”

It also directed banks to log every complaint received from their customers into the Consumer Complaints Management System (CCMS) in addition to generating 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, it added, amounts to a breach and is sanctionable with a penalty of N1, 000,000 per breach.

This guide, which replaces the guide to Charges by Banks and Other Financial Institutions issued in 2017, takes effect from January 1, 2020, and may be reviewed from time to time to reflect changes in the business environment.

The CBN urged financial services providers and their customers to acquaint themselves with the provisions and be properly guided.

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