The Central Bank of Nigeria, CBN, has directed financial institutions in the country to suspended charges on cash deposits until September 30, 2024.
The Yemi Cardoso-led CBN issued the directive to commercial banks and other financial institutions in a circular dated May 6, 2024, stating that the new directive supersedes an earlier one which empowered the banks to charge processing fees from their customers.
The earlier directive allowed the banks to charge two percent and three percent from deposits above N500,000 for individuals and N3,000,000 for corporate concerns, respectively.
This has now been abolished for now, the CBN said in the memo.
“Please refer to our letter dated December 11, 2023, referenced BSD/DIR/PUB/LAB/016/023 on the above subject, suspending processing charges imposed on cash deposits above N500,000 for Individuals and N3,000,000 for Corporates as contained in the “Guide to Charges by Banks, Other Financial Institutions and Non-Bank Financial Institutions” issued on December 20, 2019.”
Meanwhile, major stakeholders in the sector told the magazine that the CBN took the decision as part of the ongoing measures to mop up excess cash from circulation.
According to information on the CBN website cited by the magazine this week, the value of currency in circulation has risen to N3.87 trillion at the end of March.
The figure is higher than N3.69 trillion in February and N3.65 trillion in January.
Other financial analysts also contend that the step may have been taken also to assuage complaints from customers that too many charges are being deducted from their accounts.
They may be right, considering the outrage that has greeted the recent cybersecurity tax announced by the CBN this week.
“By stopping banks from charging processing fees from customers, they will be encourage to bring their excess cash to bank. It’s an incentive,” an analyst said.
