Banks to refund withdrawal charges in 30 states

The nation’s Deposit Money Banks (DMBs) are in for an immediate refund of monies, which may be running in multiple of millions, arising from unauthorized charges on withdrawals above threshold by customers in 30 states.

The Central Bank of Nigeria (CBN), in a letter signed by the Director of Banking and Payments System Department, ‘Dipo Fatokun, ordered DMBs have started applying charges on withdrawals above limit by individuals and corporates to reverse it, as well as stop henceforth.

All the states of the federation except Abia, Anambra, Kano, Lagos, Ogun, Rivers and the Federal Capital Territory are included.

The 30 states were part of the third phase of the cash-less project initiated by CBN, which was extended in those territories in July 1, 2014.

As part of efforts to stimulate response, as well as in line with what was done in the first and second phases, CBN put on hold charges against withdrawal above the threshold until further notice.

By the rule of the cash-less project, withdrawals by individuals and corporates that are above N500,000 and N3 million attract a three per cent and five per cent charges respectively on the excess values.

But in what appears like a hasty conclusion, the nation’s banks “jumped the gun” from July 1, 2015, by commencing charges on withdrawals above the limit in those states, without notification from the regulator, perhaps in erroneous judgement that it was overdue after one year of commencement.

Recently, the regulator had also reviewed issues about the proceeds of the charges, deciding that they would no longer be wholly taken by the banks, but shared with CBN.

Meanwhile, the apex bank said it has renewed its vigilance in the fight against illicit financial flows within Nigeria’s banking system.

CBN, which notes with concern a recent report by the Global Financial Integrity that ranked Nigeria as one of the 10 largest countries for illicit financial flows in the world, said it is determined to get to the root of the matters.

According to the apex bank, although it does not have an independent confirmation of the assertion, the report had estimated that about $15.7 billion of illicit funds go through the system yearly.

“In the light of this avoidably negative commentary, we wish to draw the public’s attention to several protocols on illicit fund flows, money laundering, and terrorism financing both in Nigeria and around the world, and warn that the CBN will increase its vigilance to ensure that Nigerian banks are not used as conduits for illicit fund flows, especially in foreign currencies.

“We note and applaud that in line with global best practice, Nigerian banks have started to curtail the acceptance of foreign currency cash deposits, much the same way as customers in other countries cannot just walk into banks and make foreign currency cash deposits without proper documentation,” the bank’s Director of Communications, Ibrahim Mu’azu, said.

He reassured that all citizens seeking foreign currencies for legitimate personal and/or business interests have ample opportunity to do so within the law.

According to him, CBN’s Foreign Exchange Rules have many windows for accessing foreign exchange for legitimate business, as well as for personal commitments.

To him, these include payment of medical bills, school fees, mortgages, demand notes and other bills. Also, Bureaux de Change (BDC) services to small-scale users remain valid as long as this is to meet genuine needs, and BDCs’ documentations to the CBN include the customer’s Bank Verification Number (BVN).

“The CBN will continue to support the Federal Government’s fight against money laundering, corruption, and terrorism financing and will block any and every avenue that may be used for these purposes.

“We will also ensure that persons who venture into currency speculation and currency substitution find it unattractive and dangerous. In these efforts, therefore, we seek the continued cooperation of all Nigerians to make this work for the enhancement of our shared progress, rather than the prosperity of a greedy few amongst us,” he added.