- Again, CBN rolls out good measures, but enforcement is the issue
A key highlight of the new Guide to Bank Charges released by the Central Bank of Nigeria (CBN) is reduction of Automated Teller Machines (ATM) charges on customer transactions. Under the new guidelines, withdrawal fee charged for the use of other banks’ ATM was slashed from N65 to N35. Other highlights include a maximum charge of N1 per mille for customer-induced debit transactions to third parties, and transfers or lodgments to the customers’ account in other bank on current accounts only. Also, charges for the use of Unstructured Supplementary Service Data attract a charge of N100 per N20, 000 subject to cumulative N60, 000 daily withdrawal. For cards linked to savings account, maintenance fee was reduced to a maximum of N50 per quarter from N50 per month – in other words, maximum N200 per annum instead of N600 currently being charged by banks.
We welcome the downward review of the charges. First, the guides make eminent sense in the context of the apex bank’s measures to promote the use of the multiple platforms for banking transactions. Second, it is an overdue response to the climate of arbitrariness being foisted by the banks, the consequence of which more and more Nigerians have moved beyond daily voicing their frustrations to increasingly shunning the platforms despite their convenience.
Those reductions would however seem a minor part of the problems with Nigeria’s financial services industry. Indeed, if there is any lesson to be drawn from the earlier guide on the same subject to the banks and other financial institutions issued in 2017, it is how easy for the banks to observe the guidelines – or any guidelines for that matter – in the breach.
We recall, for instance, that the 2017 guide specified that customers drawing from ATMs of other banks would be charged N65 after a third withdrawal; however, the N65 charge was in practice, actually imposed on every single transaction with nary effort made by the regulator to enforce compliance. Another ready example is the practice whereby some banks actually re-programmed their ATM to maximum withdrawal limits of N10,000 instead of N20,000 – an inelegant way of making the customer to pay more for the same basic service.
The most problematic of them all however is the turn-around time for resolving customers’ complaints when they arise – and these are often. Whereas the rules would ordinarily seem unambiguous, the bank customer, no matter how righteous his/her cause appears, inevitably ends up with the short end of the stick. For instance, the rule says that failed instant payment transaction not reversed into the customer’s account within 24 hours will attract a fine of N10,000. Today, this can take weeks as some of the banks have found a terrible habit in tossing the hapless customers up and down.
The same with the rule on inward interbank instant payment systems (NIP) into beneficiary’s accounts for which any delay beyond four minutes automatically attracts a penalty fee of N10,000 per item – more fictional than reality. And then, the instant electronic funds transfer disputes expected to be resolved within three working days – something that is hardly ever the case.
It goes without saying that the failure to apply the rules has not only put the banking consumer in an unfair disadvantage vis-à-vis the financial services providers, but has tended to undermine the trust in those alternative electronic channels. Indeed, predatory charges, no matter how cleverly disguised, can only hurt rather than help the system. It is therefore not sufficient for the apex bank to roll out the guides; far more important now is for the bank to put into place mechanisms for monitoring and enforcement.
