For maintaining customers account in 2016, eight financial Institutions generated N45 billion upon the removal of Commission on Turnover (CoT) charges in the Banking Industry.
The Central Bank of Nigeria (CBN) in 2016 indirectly reintroduced CoT fee as Current Account Maintenance (CAM) fee of not more than N1.00 per mille.
Some banks in 2015 had commenced charges on CAM fee while some refunded those excess charges back to their customers.
For instance, United Bank for Africa thus charged customers N4.2 billion in 2016 and did not charge customers on account maintenance fee in 2015. But overtime, the bank refunded the sum of N3.7 billion in respect of excess COT, monthly charges and negotiable current account maintenance fee to customers.
Zenith Bank Plc, Union Bank for Africa Plc charged customers N17.39 billion and N1.2 billion on account maintenance fee in 2016 respectively.
The likes of Sterling Bank Plc, Guaranty Trust Bank Plc (GTBank), Access bank Plc, First City Monument Bank Group Plc (FCMB) and Stanbic IBTC Holdings Plc had charged customers N22.4 billion on account maintenance fee in 2016, an increase of 9.4 per cent from N20 billion recorded in 2015.
The breakdown revealed that Sterling Bank Plc recorded a growth of 2.1 per cent on account maintenance fee from N1.42 billion in 2015 to N1.4 billion in 2016 while GTBank’s charges dropped by 20.5 per cent to N8.4 billion from N10.6 billion recorded in 2015.
GTBank in 2016 introduced Account services, maintenance and anciliary banking charges’ that increased by 40 per cent from N3.8 billion in 2015 to N5.4 billion in 2016.
A source in the bank explained that accounts maintenance charges was introduced by CBN to replace CoT comes along with turnover.
He noted that account services, maintenance and anciliary banking charges’ introduced by GTBank is not turnover related.
According to him, “Banks discharge numerous charges. GTBank cannot capture all charges on all transactions in our financial reporting. For instance, when a customer request for a cheque book, we receive commission.
“When a customer breaks cashless policy, there is a cashless charge commission .All these charges that are not turnover base are regards as Account services, maintenance and anciliary banking charges.”
Other banks include, Access Bank Plc account maintenance fee dropped by 18 per cent from N3.2 billion to N2.6 billion in 2016 while FCMB charges gained 15.8 per cent to N2.7 billion in 2016 from N2.36 billion recorded in 2015.
In addition, Stanbic IBTC Holdings, Account transaction fees significantly rose by 153 per cent to N7 billion from N2.8 billion in 2015.
Commenting, the Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, explained during the weekend, urged CBN to reconsider the account Maintenance charges.
In his words, “We had sent a letter to CBN on account Maintenance charges. CBN cannot stop one charge and introduce other charges on the same bases- which means CBN is indirectly introducing the one we had complained about.
“I don’t see the need for banks to earn that income. Banks took those money from customers and I will suggest CBN to reconsiders the account Maintenance charges again.
“These funds can be used to develop a lot of things. I believe it is not right for banks to charges customers on maintaining their accounts.”
Reacting also, President& Found, Consumer Advocacy Foundation of Nigeria (CAFON), Sola Salako, said charges on account maintenance is a fraud, stressing that CBN is helping banks to make money from doing nothing.
She emphasized that the account maintenance fee is worst than CoT.
According to her, “banks decided to charges customers any per cent and I hold CBN responsible. CBN is not checking the percentages banks are collecting from their customers.
“We are against the account Maintenance fees introduced by CBN in 2016. It is another opportunity for banks to steal from customers for doing absolute nothing. It is only in Nigeria that you hear banks charging for account Maintenance,” she said.
Recall that the CBN in 2013 commenced phased reduction of CoT which terminated with zero CoT charge this year. But in a circular to banks early 2016, signed by Director, Financial Policy & Regulation Department, Mr. Kevin Amugo, replaced the CoT with CAM but subject to maximum of N1 per N1000 (Mille).
The circular was titled, “Introduction of Negotiable Current Account Maintenance Fee Not Exceeding N1/Mille.
It stated, “The Revised Guide to Bank Charges (RGBC) which came into effect on April 1, 2013 provides for a phased elimination of COT charges in the Nigerian banking Industry. Under the Guidelines, a zero COT regime was to come into effect from January 2016.
The CBN noted that while the gradual phase out was being observed, some banks continued to charge Account Maintenance Fees in addition to the reduced COT rate, which in effect amounted to double coincidence of charges.
The CBN is not oblivious of the impact of declining crude oil prices; operation of Treasury Single Account; and other market turbulences on the viability and stability of the banking system.
“In furtherance of the mandate to promote and safeguard a sound financial system in Nigeria, banks are by this circular reminded that the 2016 Zero COT regime as jointly agreed during the 311th Bankers Committee meeting of February 12, 2013 has come into effect. In the interest of stability of the banking system, a Negotiable Current Account Maintenance Fee not exceeding N1 per mille may be charged in respect of all customer induced debit transactions. Please ensure strict compliance”.