JUST IN: No More Charges On Cash Deposit As CBN Drops Exicting Announcement; See Details
In a move aimed at providing relief to
depositors, the Central Bank of Nigeria
(CBN) has instructed banks to cease Imposing charges on cash deposits. The directive, disclosed in a circular dated May 6, 2024, and signed by Adetona Adedeji, Director of Banking Supervision at the apex bank, stipulates that the suspension will remain in effect until September 30, 2024. Previously, Nigerian banks levied a two percent charge on individual deposits exceeding N500, 000, while corporate account holders faced a two percent charge on deposits surpassing N3 million. However, the latest circular from the CBN to both financial and non-financial institutions announces the suspension of these
processing fees.
Referencing a previous letter dated December 11, 2023, which initially suspended processing charges, the CBN reiterated its stance on the matter. The circular stated: “The Central Bank of Nigeria hereby extends the suspension of the processing fees of 2 percent and 3 percent previously charged on all cash deposits above these thresholds until September 30, 2024. ”
This decision comes amidst a significant uptick in funds held outside the banking system, with external money holdings rising by 10. 67 percent to N3. 63 trillion in March 2024. The suspension of processing fees on cash deposits aims to encourage the channeling of funds into the formal banking sector, thereby enhancing liquidity and fostering financial inclusion.
By alleviating the burden of charges
on cash deposits, the CBN seeks to promote a more conducive environment for individuals and businesses to engage in banking activities. This move aligns with broader efforts to stimulate economic growth and reduce barriers to financial participation. The decision to extend the suspension until the end of September 2024 underscores the CBN’s commitment to providing stability and support to the banking sector amidst evolving economic dynamics. It also reflects the regulator’ s responsiveness to prevailing market conditions and its proactive approach to addressing
emerging challenges:
Furthermore, the rise in external money holdings underscores the need for measures to incentivize the utilization of formal banking channels. By suspending processing fees on cash deposits, the CBN aims to encourage the integration of these funds into the regulated financial system, where they can contribute to productive investment and economic development.
As Nigeria continues to navigate the complexities of its financial landscape, initiatives such as the suspension of processing charges play a crucial role in promoting financial resilience and enhancing the efficiency of the banking sector. The CBN remains committed to fostering an environment conducive to sustainable economic growth and
inclusive development.
