We can all agree that bank charges create a menace to our bank accounts, no matter how small the amount is. Sometimes, we wish within us that 65 Naira ATM charge shouldn't be deducted. But it has to. It is one of the many ways the bank gains money from its customers. Interestingly, it is the same all over the world; in the U.S. for instance, at some large regional banks, 40% of their total revenue emanated from overdraft fees and charges in 2017. This means that the subject of bank charges and fees have long been discussed, and examined. What actually establishes the difference is regulation.
EU banks are regulated by a number of regulations, while the opposite is present in the U.S. The U.S. is punctuated with a lack of strong regulations to curb the menace of incessant bank account deductions.
In spite of all these, a new development arose in Nigeria some weeks back. It might seem like nothing now, or an event that does not concern the regular man. But it concerns every single one of us. As long as you use a Nigerian bank, the new law by CBN concerns you.
Now this is the way it works:
For every deposit and withdrawal you make, you will be charged a certain percentage. Furthermore, daily cumulative or single cash withdrawals of N500,000 will result into a 3% charge, while you will be charged another 2% for deposits above the amount. For companies and other corporate bodies, the benchmark is established at N3 million, resulting into 3% for deposit and 5% for withdrawal. However, this is only on the excesses on the round figures of N500,000 and N1 million Naira.
The CBN believes this will allow for digital payments and transactions, reducing the amount of cash held by Nigerians.
At this point, there might be a bit of a confusion. Understand that the charges will only be on the excesses on the N500,000 or the N1 million. If you make a deposit of N501,000, the charges will only be on the N1,000. It will be 2% of the N1,000 which would translate to N20.00. It can be further explained as this; when you deposit N700,000, the excess of N200,000 will be charged and not the N500,000 itself.
This act, or CBN directive should be looked at with disdain. It is just another act to rob the average Nigerian of his hard-earned cash. Just a few days before this directive, the government increased the VAT rate from 5% to 7.5%. Also remember that these banks will still take its SMS charges, account maintenance charges, transaction charges, ATM use charges and so on. What more will be added in the future?
It doesn't end there. The Central Bank of Nigeria also issued a directive mandating a ₦50 stamp duty on every POS transaction above ₦1000. This means that you will now be charged for every transaction above N1,000 when you use the POS machine.
This is simply another ploy of the power-drunk individuals to swindle innocent Nigerians, all in the name of pushing for a cashless transaction policy. The money from this will not go to the right channels but the pockets of these individuals.
God bless Nigeria.
