The Central Bank of Nigeria has directed banks to suspend charges on cash deposits.
The apex bank had announced this directive in a May 6, 2024, circular signed by its Director of Banking Supervision, Adetona Adedeji.
According to the apex bank, the suspension will last until September 30, 2024.
This latest development is coming on the heels of Nigerian banks commencing charging 2% on deposits above N500,000 for individuals, and 2% on deposits above N3 million for corporate account holders.
But, according to this latest circular to financial and non-financial institutions in the country, the apex bank said the processing fees have been suspended.
The development comes as money outside the banking system skyrocketed by 10.67% to N3.63 trillion in March 2024.
What They’re Saying:
The CBN’s circular read below:
“Please refer to our letter dated December 11, 2023, referenced BSD/DIR/PUB/LAB/016/023 on the above subject, suspending processing charges imposed on cash deposits above N500,000 for individuals and N3,000,000 for corporates as contained in the ‘Guide to Charges by Banks, Other Financial Institutions and Non-Bank Financial Institutions’ issued on December 20, 2019.“The Central Bank of Nigeria hereby extends the suspension of the processing fees of 2% and 3% previously charged on all cash deposits above these thresholds until September 30, 2024.”
Why It Matters
- The directive to suspend cash deposit fees by the CBN will no doubt provide relief to bank customers who have to deal with the harsh Nigerian economy in addition.
- In addition, the CBN may be looking to reduce the circulation of physical cash and promote digital transactions by removing likely obstacles for depositing cash in banks.
- Finally, the decision of the apex bank to halt cash deposit fees is a response to the significant increase in money outside the country’s banking system. This new directive aims to encourage individuals and businesses to keep their funds within a regulated financial institutions, and in so doing, enhance monetary policy usefulness and stability.
Bottom Line:
Halting cash deposit fees is definitely a strategy by the CBN to promote financial inclusion, make banking services more accessible and affordable for individuals and businesses, in an attempt to encourage them to use formal financial channels instead of traditional means of storing money.
