Indications have emerged that Deposit Money Banks in the country have started experiencing drastic drop in their revenue due to the cancellation of some charges and the downward review of others.
Our correspondent gathered that the revised guidelines on charges introduced by the Central Bank of Nigeria in April was already affecting the banks’ profitability, thereby making them to devise other means of making profit.
Senior executives in the banking sector, who spoke with our correspondent, said there was the need for the CBN to review some of the guidelines on charges.
A senior bank official, who preferred not to be mentioned, said, “The new guidelines are impacting on profitability negatively. The business of banking relies on huge capital, which in turn, should produce a reasonable level of profit.
“In a scenario where banks cannot make reasonable profit, then it affects innovation and other things that will make services convenient for customers.”
The Group Managing Director, First Bank of Nigeria Limited, Mr. Bisi Onasanya, while commenting on the bank’s financial results for the year ended 2012, said, “A number of initiatives introduced by the CBN in 2012 are set to have some impact on bank profitability and indicate that banks will need to be creative in managing their revenue streams.
“Our financial priorities in 2013 include cost containment and capital management. In addition, we will also ensure our non-performing loan ratios are kept within an acceptable threshold, while efficiency levels increase across the bank.”
Apparently bowing to public outcry, the CBN had recently announced new guidelines on bank charges.
Part of the guidelines includes the cancellation of the N100 monthly Automatic Teller Machine card maintenance fee introduced by some banks.
The CBN in a circular titled, ‘Revised guide to bank charges,’ pegged the maintenance fee at N100 annually.
It also pegged the mandatory cost of Short Message Service alert at N4 subject to the Nigerian Communications Commission’s directives.
The circular, which took effect from April 1, 2013 read, “In order to reflect current developments in the market and provide clarity on banking terms, the CBN recently conducted a review of the guide in consultation with all the banks and discount houses, Bankers’ Committee and financial experts, and also considered inputs received from other stakeholders to produce the revised guide to bank charges.”
On electronic transfer, the bank said N70 would be charged on transactions below N500,000, while N100 should be charged on transactions of between N500,000 and N1m. Transactions above N1m will attract a charge of N500.
The CBN said the issuing fee of a debit card should not be more than N1,000, while international withdrawals per transaction on debit cards should be charged at N240 rather than N1,000 being currently charged by virtually all the banks.
The CBN also pegged the interest on savings deposit accounts at a minimum of 30 per cent of the Monetary Policy Rate per annum.
The Governor, CBN, Mr. Lamido Sanusi, had said customers would no longer pay N100 on ATM withdrawals whenever they used banks other than theirs from December 17, 2012.