Nigeria’s Apex Bank, the Central Bank of Nigeria, has ordered Deposit Money Banks to refund illegal fees charged to customers over a period of one year. The order was contained in a circular dated 12 June and was signed by Mr. Franklin Ahonkhai, Director, Financial Policy and Regulation Department, CBN.
The Central Bank said some banks have been overcharging customers for Commission on Turnover in the last few months while some lenders imposed illegal maintenance fees on the CoT-free accounts. The CBN has given all the DMBs 30 days to either refund the excess charges or face severe penalties.
The circular titled, ‘Implementation of the Revised Guide to Bank Charges – Commission on Turnover’, was posted on the CBN’s website on Thursday June 12th 2014. It reads, “It will be recalled that the CBN in conjunction with the Bankers’ Committee, issued the revised guide to bank charges (the guide) on March 27, 2013. The guide sought to standardise charges for various products and services offered by banks. Section 3.1 of the guide provides that Commission on Turnover is negotiable subject to maximum of N3 per million in 2013; N2 per million (N1000) in 2014; N1 per million in 2015 and that no CoT will be charged from 2016. Information available to the CBN indicates that some banks are still charging the CoT at the rate of N3 per mille which was the agreed rate for 2013.”
The circular further stated, “The CBN hereby reiterates that the maximum CoT allowed by the guide for 2014 is N2 per million. Consequently, all banks that have charged excess CoT since the effective date of the guide are hereby required to provide a refund to the affected customers no later than 30 days from the date of this circular.”
It further stated, “Our attention has been drawn to the practice by some banks of charging fees which are alien to the guide. For example, some banks offer accounts that are supposedly CoT-free but impose a maintenance fee or similar fee – a fee not covered by the guide. For the avoidance of doubt, while paragraph 4 of the preface to the guide states that the charges on products and services are not exhaustive, it however requires banks wishing to levy charges not covered by the guide to obtain the prior approval of the CBN. Banks that have charged customers maintenance fee (or any fee for that matter), that is neither covered by the guide nor has been pre-approved by the CBN, are hereby required to refund the fee to the customers not later than thirty (30) days from the date of this circular.”
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This article was first published on 16th June 2014
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Nigeria’s Apex Bank, the Central Bank of Nigeria, has ordered Deposit Money Banks to refund illegal fees charged to customers over a period of one year. The order was contained in a circular dated 12 June and was signed by Mr. Franklin Ahonkhai, Director, Financial Policy and Regulation Department, CBN.
The Central Bank said some banks have been overcharging customers for Commission on Turnover in the last few months while some lenders imposed illegal maintenance fees on the CoT-free accounts. The CBN has given all the DMBs 30 days to either refund the excess charges or face severe penalties.
The circular titled, ‘Implementation of the Revised Guide to Bank Charges – Commission on Turnover’, was posted on the CBN’s website on Thursday June 12th 2014. It reads, “It will be recalled that the CBN in conjunction with the Bankers’ Committee, issued the revised guide to bank charges (the guide) on March 27, 2013. The guide sought to standardise charges for various products and services offered by banks. Section 3.1 of the guide provides that Commission on Turnover is negotiable subject to maximum of N3 per million in 2013; N2 per million (N1000) in 2014; N1 per million in 2015 and that no CoT will be charged from 2016. Information available to the CBN indicates that some banks are still charging the CoT at the rate of N3 per mille which was the agreed rate for 2013.”
The circular further stated, “The CBN hereby reiterates that the maximum CoT allowed by the guide for 2014 is N2 per million. Consequently, all banks that have charged excess CoT since the effective date of the guide are hereby required to provide a refund to the affected customers no later than 30 days from the date of this circular.”
It further stated, “Our attention has been drawn to the practice by some banks of charging fees which are alien to the guide. For example, some banks offer accounts that are supposedly CoT-free but impose a maintenance fee or similar fee – a fee not covered by the guide. For the avoidance of doubt, while paragraph 4 of the preface to the guide states that the charges on products and services are not exhaustive, it however requires banks wishing to levy charges not covered by the guide to obtain the prior approval of the CBN. Banks that have charged customers maintenance fee (or any fee for that matter), that is neither covered by the guide nor has been pre-approved by the CBN, are hereby required to refund the fee to the customers not later than thirty (30) days from the date of this circular.”
