Following the expiration of a temporary suspension by the Central Bank of Nigeria (CBN), banks and other financial institutions in Nigeria have resumed the collection of charges on large deposits from individual and corporate accounts. The CBN had initially directed the suspension of processing fees on large cash deposits and other transactions in December 2023. However, the temporary reprieve came to an end, prompting banks to reinstate the charges.
The CBN’s directive, issued through a circular signed by Adetona S. Adedeji, acting Director of Banking Supervision, had suspended processing fees of two percent and three percent on deposits exceeding N500,000 for individual accounts and N3,000,000 for corporate accounts. This waiver, aimed at boosting liquidity in the financial system and alleviating cash scarcity, was initially scheduled to last until April 30, 2024.
With the expiration of the suspension, banks have promptly resumed the collection of processing fees on large deposits. Notably, an email from one of the commercial banks announced the reintroduction of these charges effective May 1, 2024. The resumption of charges on large deposits is expected to have implications, particularly for small business owners, as it may discourage bank deposits and incentivize cash transactions.
The decision to reinstate processing fees on large deposits comes amidst changes in the banking landscape, with major commercial banks experiencing a decline in their market capitalization. Notably, several banks have lost their trillion market capitalization status in the Nigerian Exchange (NGX), reflecting challenges in the financial sector. Despite market fluctuations, the domestic bourse closed the holiday-shortened week on a positive note, with gains in key stocks driving the market’s positive performance.
Financial analysts suggest that the decision to resume processing fees on large deposits may be attributed to the stabilization of the financial system. With cash scarcity concerns easing and payment platforms functioning more effectively, the CBN aims to encourage the adoption of electronic channels while ensuring the financial health of banks. Despite the challenges posed by the reintroduction of charges, stakeholders anticipate that normalcy in the banking sector will prevail as efforts to promote alternative channels intensify.
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