CBN; Banks Ordered to Refund Excess CoT Charges

The Central Bank of Nigeria, CBN, has ordered banks to refund illegal fees charged above the regulatory maximum to customers over a period of one year. It has also banned banks from imposing account maintenance fees on the Commission on Turnover, CoT, of customers.

The order was given in a circular by the Director, Financial Policy and Regulatory Department, Mr. Frankline Ahonkhai to all deposit money banks.

The CBN said that based on the revised Guide to Bank Charges issued last year, maximum CoT charge for 2014 is N2 per mile (N1,000) but some banks are charging customers above this rate.

The circular read , ‘’Section 3.1 of the Guide provides that Cot is negotiable subject to a maximum of N3 per mile in 2013; N2 per mile in 2014; N1 per mile in 2015; and that no CoT would be charged in 2016. ‘’Information available to CBN indicates that some banks are still charging CoT at the rate of N3 per mile which was the agreed rate for 2013’’

The circular further stated ‘’The CBN, hereby, reiterates that the maximum CoT allowed by the Guide for 2014 is N2 per mile. Consequently, all banks that have charged excess Cot since the effective date of the Guide are hereby required to refund same to the affected customers not later than thirty days from the date of this circular.

‘’Our attention has also been drawn to the practice by some banks, of charging fees which are alien to the Guide. For example, some banks offer accounts that are supposedly CoT free, but impose a maintenance or similar fee- a fee not covered by the Guide’’.