ABUJA, May 7, 2024 – The Central Bank of Nigeria (CBN) has directed all commercial banks to halt the imposition of charges on cash deposits until September 30, 2024. This directive comes as a relief to bank customers who have been vocal about the additional costs associated with depositing large sums of money.
Background of the Directive
The CBN’s decision was detailed in a circular issued on May 6, 2024, signed by Adetona Adedeji, the Director of Banking Supervision. The circular references a previous notification from December 11, 2023, which initially suspended these fees. The fees in question included a 2% charge on individual deposits exceeding N500,000 and a 3% charge on corporate deposits over N3 million.
Impact on Customers and Banks
The announcement follows concerns raised by customers regarding banks beginning to levy processing fees for cash deposits starting from May 1, 2024. The feedback from bank customers indicates a significant dissatisfaction with these charges, which many viewed as an undue financial strain. By extending the suspension of these fees, CBN aims to alleviate these concerns and promote greater financial inclusion.
Official Statements and Reactions
In the circular, CBN clearly stated, “Please refer to our letter…suspending processing charges imposed on cash deposits above N500,000 for Individuals and N3,000,000 for Corporates…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.”
This move has been broadly welcomed by the public and financial analysts, as it supports both individual savers and business operations by reducing the overhead costs of handling large cash transactions. Financial institutions are instructed to comply with this directive and continue to accept cash deposits without any charges.
Broader Financial Implications
The suspension of deposit fees is part of a larger strategy by the CBN to encourage more cash deposits at banks, thereby increasing the liquidity available within the financial system. This policy may also be seen as a response to the economic impacts of recent global financial uncertainties, which have prompted central banks worldwide to adopt more flexible and supportive monetary policies.
Looking Forward
As the deadline of September 30, 2024, approaches, stakeholders in the Nigerian financial sector will be keenly watching the impact of this directive on banking behaviors and the broader economy. Analysts suggest that the CBN may extend or modify these measures depending on economic conditions and the effectiveness of the current policy in increasing cash liquidity.
The CBN’s proactive approach highlights its commitment to stabilizing the financial market and bolstering economic growth, making it easier for Nigerians to manage their finances without the added burden of transactional fees.
