7 guides to understanding CBN’S new directive on bank charges

1. Savings Account Holders Will Still Pay Card Maintenance Fee: So, your bank will still charge you for card maintenance fee, despite the review of the charges. What has, however, changed is that you will no longer be changed the N50 card maintenance fee every month. Instead, you will be charged per quarter. This brings your total cost of card maintenance to N200 per year as opposed to N600 per year.

2. Current Account Maintenance Fee (CAMF) Is Now One Naira: First, the current account maintenance fee is strictly for current accounts. Savings account are exempted from paying that. Second, what has changed is that current account holders will no longer pay N50 for every transaction no matter how much is involved. Instead, they will be charged one naira per every 1000 naira. This shall apply to only “for customer induced debit transactions to third parties and transfers or lodgements to the customers’ account in other banks on current accounts only”.

Also, card maintenance fee is scrapped for cards linked to naira-denominated current accounts.

3. ATM Withdrawal Charges Is Now N35: So, this one is straightforward. As against paying N65 when you use other banks’ automated teller machines, ATMs for the fourth time in a month, you will now be charged only N35.

4. Your Debit Card Will Still Cost N1,000: So, your bank charges you 1,000 for a new ATM. If you lose it and need to replace it, they will charge you another 1,000 naira. That remains the same in the new guideline.

What has changed, however, is that banks can no longer charge more than 1,000 naira for premium debit cards. And no charge shall be required for pre-paid card loading/unloading.

5. Closing or Reactivating Your Account Should Cost Nothing: Before now, your bank could reactivate your account by simply depositing some money into it. But not so with closing the account. There would be charges. But going forward, there will be no more charges for reactivation or closure of accounts such as savings, current and domiciliary accounts.

However, if you walk into your bank and demands a status enquiry such as confirmation letter, letter of non-indebtedness and reference letter, your bank reserves the right to charge you a fee of N500 per request. But no more than that.

6. Your Hardware Token Is Now N2,500: So, right now, banks charge N3,500 for the hardware token used to complete electronic transactions. But the new guideline has mandated the banks to charge no more than a recovery cost of N2,500 per hardware token. Customers will also bear the cost in the event of physical damage, loss of token or replacement after expiration, also subject to a maximum recovery cost of N2,500.

Software token, aka, one-time password remains free.

7. USSD Charges Shall Continue to Apply: So, you may recall that sometime in March this year, some telecom companies tried to charge Nigerians N4 for every 20 seconds spent on, Use of Unstructured Supplementary Service Data, USSD transactions. Fortunately, the CBN distanced itself from the plan and the Nigerian Communications Commission shut it down almost immediately. That may have accounted for why the CBN didn’t touch the USSD charges in the new guideline. The charges remain the same.

remember the telcos trying to charge N4 per

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

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

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 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.