New guide to bank charges takes off today

Today marks the take-off point for a new regime of banking charges against customers for services rendered, but there is general apathy trailing expectations of compliance by the financial institutions.

From tomorrow, a graduated fee scale for electronic transfers to replace the current flat fee of N50 will begin, as transfers below N10,000 will attract a maximum charge of N10; transfer from N5001 – N50,000, N25; and transfers above N50,000, N50

Card maintenance fee on the current account has been removed as the accounts already attract maintenance fees. Savings accounts will now attract a card maintenance fee of N50 per quarter (three months) from N50 per month. Yearly card maintenance fee on foreign currency denominated cards is reduced to $10 from $20.

Remote-on-Us, that is, Automated Teller Machine (ATM) charges after third withdrawal from other banks’ machines within a month are reduced to N35 from N65. The charge for hardware token will be on a cost-recovery basis subject to a maximum of N2,500 from previous maximum charge of N3,500, while the fee for SMS mandatory alert will be on cost recovery from previous maximum charge of N4. Bill payment via e-channels will attract a maximum charge of N500 from 0.75 per cent of the transaction value subject to a maximum of N1,200.

Meanwhile, some banks are already sending messages to their customers in readiness for the January1, 2020, commencement of the new charges, which cut nearly all applicable fees by the lenders significantly.

Specifically, Fidelity Bank, Union Bank, and Wema Bank have sent messages to customers, highlighting various aspects of the cut in the charges against customers for banking transactions, as well as affirming their readiness to comply with the rules.

Already, the Central Bank of Nigeria (CBN) said the revision of the Guide to Charges and strengthening of the Consumer Protection Regulation was necessitated by continued evolution in the financial industry over the past few years, which has spurred innovation and the introduction of new products, channels and/or participants.

However, customers have largely remained apathetic over the expected compliance level of the banks with the new rules, with some asking for strict enforcement, routine monitoring, and survey of customers’ opinions by the regulator to ascertain the actual performance of banks.

In a random opinion poll of 50 banks’ customers by The Guardian across Festac and Ago Palace Area of Lagos State, about 37 said the banks will always find a way to extort people, especially when knowledge base of the rights are very low.

“Like they are talking about the use of the mobile phone to do banking in various campaigns, they should also get a strategy to teach Nigerian illiterates, who now bank with them, what to do when they have complaints,” Okon Akpan retorted

Another bank customer of one of the top four banks in the country, who identified himself as Daniel, said it would be a miracle to have a sustained change of attitude by banks beyond the initial show of compliance.

“They have dribbling me over N400,000 illegally withdrawn from my account for more than six months. Now the contact person in the bank is no longer answering me. Maybe, if this new law causes a change, then I will begin to believe,” he said.

Alani is an operator of small-scale drycleaning shop in Festac but has refused to believe that banks will agree to obey the new rule that has cut their charges significantly, adding that “one way or the other, they will still be deducting money our accounts. How will they make money if they don’t do it again? They should force them to teach us how to complain to CBN”.

“I am still afraid of banks because when you have problems, they will do as if you are ‘on your own’ and that they don’t understand what you are talking about. That is how my N65,000 has remained hanging for some time now after I did a transfer that failed. One even told me that she cannot do anything about the money. I have not even seen the new law you are talking about,” she retorted.

CBN, on December 20, 2019, released two regulatory guidelines- a revised Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions, to replace the one issued in May 2017; and Consumer Protection Regulations to implement the principles prescribed in the Consumer Protection Framework issued in November 2016.

“The revised Guide to Charges is thus yet another move by the CBN to build an inclusive banking system that adequately caters for the needs of the banking public whilst preserving the financial sustainability of banks, other financial and non-bank financial institutions.

“The Guide will incentivise stakeholders, especially those making micropayments, to further embrace electronic banking channels, thus improving financial inclusion. It will also reduce the cost of banking services to customers to deepen access without much impact on the bottom line of regulated institutions under the purview of the bank.

“The new rules provide clarity on the roles and responsibilities of all participants in the industry. It sets our minimum standards on fair treatment of consumers, disclosure and transparency, business conduct, complaint handling, and redress in order to protect the rights of consumers, hold banks, other financial and non-bank financial institutions accountable and preserve trust in the entire financial system,” CBN’s Director of Corporate Communications Department, Isaac Okorafor, said.

The apex bank said it is now imperative for continued vigilance by the regulatory authorities to ensure the protection of consumer rights as more individuals are financially included while encouraging market forces to increasingly drive pricing for financial products.

These innovations, supported by a sound regulatory framework, have indeed transformed the Nigerian financial landscape over the past decade, which has driven financial inclusion, according to Enhancing Financial Innovation and Access (EFInA), as financial inclusion increased to 63.2 per cent as at December 2018 from 60.3 per cent in December 2012.

Also, there is an increased use of electronic payments across several channels by banks’ customers, as data from the Nigeria Inter-Bank Settlement System (NIBSS) showed that PoS transactions increased by 4,692 per cent between 2012 and 2018 from N48.46 billion to N2.3 trillion while electronic transfers increased by 1,967 per cent from N3.8 trillion to N80.42 trillion.

Paper-based cheque transactions declined by 32 per cent from N7.48 billion to N5.03 billion. Similarly, statistics from NIBSS on electronic transfers from June to November 2019 show that a number of transfers below N10,000 accounted for 61 per cent of the number of electronic transfer transactions. This is a confirmation that that the reduction of the charges for micropayments has huge potential for financial inclusion.

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