The Chartered Institute of Bankers of Nigeria (CIBN) has disclosed the effects of the decision of the Central Bank of Nigeria (CBN) to slash withdrawal fees on Automated Teller Machines (ATM) and others.
Chairman, CIBN, Uche Olowu, explained that the impact of the decision might be felt negatively in the short term but would be favourable in the long run to the lenders.
According to CBN, it was mentioned that Customer complained against excess/unauthorized charges which hits 1, 612.
According to a new directive contained in the new Guide to Bank Charges, stated that the withdrawal fee charged for the use of other banks’ ATM had been reduced to N35, from N65 earlier charged.
Also, the card maintenance fee was reviewed to N50 every three months (quarterly) from the initial monthly period. The guide released by the CBN contains major changes in electronic transactions’ charges in Nigeria.
Speaking on the withdrawal charges, Olowu said as financial inclusion rises in the country, the bottom line of banks would rebound. And with investment diversification by the banks, the banking sector would be exposed to more revenue opportunity.
“So, the implication is that it will affect the bottom line of the banking industry in the short term.
“But, as more people access financial services, at long terms, the banks will be better off for it.”
Meanwhile, the Minister of Communications and Digital Economy, Isa Pantami had commended the directive, stating that lower service charges would encourage higher patronage of electronic services.
What you need to know about the review
The cost to either obtain a new hardware token or a replacement is reduced from N3,500 to N2,500.
Bills Payment (Including Bills Payment through other E-channels) has been reduced to a maximum of N500 (negotiable) per beneficiary from N1,200.
Charges on electronic funds transfer have been reviewed to N10 on transaction below N5,000, N25 on the transaction between N5,001 – N50,000 and N50 on transaction above N50,000.
Charges on foreign currency denominated debit/credit cards have been reduced to $10 per annum from $20 per annum.
Also, Card Maintenance Fee on Naira debit/credit cards is reviewed to N50 every three months (quarterly), from the initial N50 monthly.
However, transaction alert on consumer-induced transactions remains N4 while no charge for bank-induced transactions.
The CBN also removed Card Maintenance Fee on all cards linked to current accounts and also instructed banks to charge a maximum of N1 per mille for customer induced debit transactions to third parties, and transfers or lodgments to the customers’ account in other banks on current accounts only.
However, note that any financial institution that breaches any of the provisions as contained in the new guide will pay a penalty of N2 million per infraction or as may be determined by the CBN from time to time.