Connect with us


The CBN Is Reducing Charges on ATM Use and Bank Transfers

The Central Bank of Nigeria has announced a downward revision of a host of charges levied by banks for electronic transitions in the country. It says this move is aimed at driving financial inclusion for the millions of Nigerians underserved by the financial system.

In a circular put out on Friday, 20th December, the apex bank explained that the new rates were among a number of adjustments to its Guides to Charges by Banks. Other rule changes and additions include sections on accountability and responsibility, and sanctions to be faced by banks which charge their customers arbitrarily or above the stipulated limits.

It also compels the banks to review other charges so that they “align with market developments.”

Read more about the CBN

According to the CBN, banks will now be allowed to charge ₦10 on transfers above ₦5,000, ₦25 on transfers between ₦5,000 and ₦50,000, and ₦50 on transfers above ₦50,000. This should see banks move away from the status quo, in which a flat rate of ₦50 is charged on transfers below ₦10 million.

Also, charges on the use of ATMs belonging to banks other than the card issuer will be cut from the current ₦65 to ₦35.

Customers will be charged a card maintenance fee of ₦50 for their savings account on a quarterly basis (once in three months) instead of monthly, as is presently the case.  Current account holders will be exempted from paying the fee.   

There have been mixed reactions to the new rules. Some analysts have said that the lower charges will encourage more people to engage with the financial system. They cite an EFInA (Enhancing Financial Innovation and Access) report from 2018, which put the number of unbanked Nigerians at over 60 million. According to them, the downward revision of ATM and bank transfer charges will make it more open to poorer Nigerians, especially in rural areas.

However, critics say that the lower charges will shrink an important source of bank’s revenues, and slow the rate of ATM deployment across the country. They claim that this could ultimately hinder financial inclusion, as fewer ATMs would mean a more sluggish growth for electronic transactions over the next few years.

The CBN first published its Guide to Bank Charges in 2004, and revised it in 2013 and 2017.

The 2019 revision to the guidelines comes after major changes to Nigeria’s tax rules were approved by the country’s Senate in November. The reforms, detailed in a new Finance Bill, propose a ₦50 stamp duty charge on electronic bank transfers of ₦10,000 or more. This raises the threshold for the charge well above the current starting point of ₦1,000.          

The new rules are expected to take effect on January 1, 2020.

Featured image source: Business Today

Continue Reading
Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

1 Comment

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Did You Know?


Discover Nigeria



To Top