The Central Bank of Nigeria released a new set of guidelines to charges by banks and other financial institutions last week. The new charges are effective from May 1 2017.
Here are the key things you need to know about these charges.
- On-us withdrawals refers to cash withdrawals from an ATM in any of the branches of your bank
- Not -on-us withdrawals refers to cash withdrawals using an ATM from your bank on an ATM of another bank
- On-us withdrawals are free while not-on us withdrawals incur a charge of N65 after the third withdrawal within the same month
- Banks are also allowed to continue to charge you not more than N4/SMS for transactions initiated by you. This is provided that you requested for this service.
Electronic Banking Charges
- New hardware tokens will cost a maximum of N3,500
- While software tokens are free, banks will charge an SMS rate of not more than N4/SMS.
- If you lost your hardware token and want it recovered, you will be expected to pay a maximum of N3,500
- However, you bear the full cost only in the event of physical damage, loss of token or replacement after expiration
- Electronic fund transfers will now incur a charge of N50 if below N10 million. Transfers above N10 million will also cost N50 flat.
- RTGS transfers will cost N550.
- Banks are allowed to charge card maintenance fees at $20 per annum (or its equivalent) for foreign currency denominated debt/credit cards.
- Naira debit/credit cards will cost N50 monthly in card maintenance fees.
- Banks will also charge you N1,000 one-off charge for issuance of debit cards. If you lose the card and want it replaced it will also cost N1000 one-off.
Interest on deposits
- Banks are mandated to pay an interest of not less than 30% of the monetary policy rate for any cash on savings deposits.
- This translates to about 4.2% per annum considering that the MPR as at March 2017 was 16%
- The MPR is the rate at which banks borrow money from the CBN.
- For deposits held as collateral, the bank will pay a negotiable interest rate subject to a minimum of 30% of MPR.
- This means, if you take a loan from a bank and use your cash deposits as collateral, the bank will pay you a minimum of 30% of MPR, which is 4.2%.
Interest rates and lending fees
- For local currency loans, the CBN says interest rates are negotiable but should reflect MPR.
- Thus, when banks want to charge you interest rate on loans it will be MPR plus XX%.
- Banks are also mandated to notify their customers 10 business days in advance whenever there is a rate change.
- For mortgage refinancing, the CBN says rates are negotiable subject to a maximum of MPR plus 5%
- This means those seeking mortgage loans can expect to pay at least 19%, based on the current MPR of 14%.
- For defaulters, the CBN places a maximum of 1% flat per month of unpaid amount in addition to charging current rate of interest on outstanding debt.
- Management fees charged on loans is limited to a maximum of 1% of the principal amount disbursed and should be a one-off charge.
- Facility Enhancement fee will attract a negotiable but subject to a maximum of 1% of the additional charge discharged. For example, if you collected a loan of N100m and decided to add an extra loan of N10m from the same bank under the same facility, the bank will only charge a maximum one-off fee of 1% of the N10 million.
- Management fee and Facility Enhancement fee cannot be charged same time.
- Management fees are only charged for all shared requests and renewal of expired facilities.
- Restructuring fee is also negotiable but subjected to a maximum of 0.5% of the outstanding amount being restructured. It is also one-off
- For example, if you have a loan that you want to restructure, either for a longer tenor or lower interest rate or increased facility amount, you will have to pay a restructured fee.
- Commitment fees are also negotiable subject to a maximum of 1% on the undisbursed amount of the facility. This is also one-off
- For example, if you obtained a facility of N100m and have been disbursed N20m from bank, based on your disbursement terms, the bank can charge you 1% for the balance N80m.
- Current account maintenance fee (CAMF) will be charged at a negotiable but subject to a maximum of N1 per mille when you initiate a transfer out of your account.
- For forex transfers out of your accounts using swift, you will be charged 0.5% COT plus any other associated off shore transfer charges. Thus, if you transfer $1,000 from your domiciliary accounts, they will charge you $5.
- Withdrawals on domiciliary accounts attract a charge of 0.05% of transaction value or $10 whichever is lower. This means they can’t charge you more than $10 for withdrawals.
- Bank drafts still remain the same at N300 and N500 from current and savings account respectively for account holders. It is N500 plus 0.1% of draft value for non-customers
- Banks can also charge N100 flat as processing fee for purchase and sale of treasury bills for their customers.