Banks and other financial institutions in Nigeria have resumed collection of charges on large deposits from individual and corporate accounts, a report by an online platform, Nairametrics, has shown.
This followed the expiration of the temporary suspension issued by the Central Bank of Nigeria (CBN) on same.
Daily Trust reports that the CBN had in December 2023 directed all commercial banks and non-bank financial institutions to immediately suspend processing fees on large cash deposits and other transactions.
The CBN’s directive was contained in a circular signed by the acting Director, Banking Supervision, Adetona S. Adedeji.
- Court restrains police from arresting APC Ward Excos who suspended Ganduje
- We’ll continue with N70bn corruption case against Tinubu’s Minister – EFCC
Our correspondent reports that the apex bank, in a circular titled ‘Guide to Charges by Banks, Other Financial Institutions and Non-Bank Financial Institutions’, issued on December 20, 2019 (FPR/DIR/GEN/CIR/07/042), had placed processing fees of two per cent and three on deposits of over N500, 000 for individual accounts and N3,000,000 for corporate accounts respectively.
The processing fees were, however, suspended in December temporarily until 30th of April, 2024.
The waiver was part of measures by the apex bank to boost liquidity in the financial system by encouraging bank deposits and cushioning the effect of cash scarcity at the time.
Daily Trust on Saturday reports that December 2023 was a period of acute cash scarcity with banks limiting withdrawals while many Nigerians, especially small business owners, expressed frustration over the scarcity.
However, six months later, the processing fees have been reinstated with the banks resuming the charges.
This happened as major commercial banks have lost their trillion market capitalisation status in the Nigerian Exchange (NGX) following a sharp drop in their stocks.
An email from one of the commercial banks announced the resumption of the processing fees on large deposits.
The announcement read: “We wish to remind you of the temporary suspension of the processing fees on cash deposits above N500,000 for individuals and N3,000,000 for corporates by the Central Bank of Nigeria until Tuesday, April 30th, 2024.
“During this period, you could deposit cash above these thresholds at any Sterling Branch without incurring the usual 2% & 3% processing fees respectively for individuals and corporates.
“This is to inform you that effective Wednesday, May 1st, 2024, processing fees have been reintroduced on cash deposits exceeding the thresholds.
“This means when you deposit cash above N500,000 (for individuals) and N3,000,000 (for corporates) at any Sterling Branch, the applicable processing fee of 2% and 3% will be incurred respectively”, the bank said in the circular.
Decision will affect small businesses
The immediate past Chairman of the Lagos State chapter of the Nigerian Association of Small and Medium Enterprises (NASME), Dr. Adebayo Adams, said the resumption of the charges would have a very serious impact on small business owners.
Adams, who confirmed receiving the message from his bank with effect from 1st of May, said, “This would have a serious impact on small business owners and it would discourage a lot of people from bringing their cash to the bank.
“So, they would prefer doing transactions in cash and they would be handling cash around and this might increase armed robbery and kidnappers would be asking for cash”, he added.
Action not out of place
A financial analyst at Augusto, Ayokunle Olubunmi, in a chat with Daily Trust, said the banks must have reinstated the charges because of the normalcy in the financial system.
According to him, since the suspension of the charges, the banks have put more efforts in driving adoption of electronic channels.
He said: “You recall that during that period, there were issues with the payment platforms and there seems not to be enough cash in circulation at that time. The reason why that charge was actually suspended was to try and see that Nigerians can really collect cash over the counter.
“But if you look at it now, things seem to have normalised at least in terms of cash. There is no more cash scarcity. Most of the banks seem to have cash and the ATMs are dispensing. Since things have gone back to normal, the CBN feels it is imperative to have those charges back and also encourage people to use alternative channels,” he said.
‘First Bank, UBA, GTCO, Access out of SWOOT’
Meanwhile, First Bank, UBA, GTCO, Access Bank, and Zenith in the SWOOT (Stocks Worth Over One Trillion Naira) category have lost their status after their stocks dipped significantly last month due to the downturn in the market.
Out of the five banks, only Zenith still maintains the status with FBN Holdings, GTCO, UBA and Access Bank, dropping out after their stocks fell below the trillion naira market capitalisation.
In a related development, the domestic bourse ended the holiday shortened week on a positive note as the All-Share index gained 1.46% to close at 99,587.25 points.
This was the first weekly gain since March, according to a report with gains in MTNN (+6.44% w/w), ZENITHBANK (+6.13% w/w) and GTCO (+7.32% w/w) propelling the market’s positive result.
As a result, the year-to-date (YTD) return rose to 33.18%, while the market capitalisation gained N811.48bn w/w to close at N56.32tn.
Yesterday, the trade turnover settled higher relative to the previous session, with the value of transactions up by 28.14%.
A total of 446.57m shares valued at N7.10bn were exchanged in 9,297 deals. ACCESSCORP (-0.57%) led the volume and value chart with 151.80m units traded in deals worth N2.68bn.
Market breadth closed positive at a 1.53-to-1 ratio with advancing issues outnumbering the declining ones.
