Is quite shocking that Nigerians woke up on Wednesday morning and the first thing that came to them is the new Nigerian bank charges. I myself was really shocked as to the reason why the central bank came up with such policy, as it’s significant effect is more on the business men and women.
Two percent charge on deposit and three percent charge on withdrawal for amount above five hundred thousand naira and for an individual account. A whopping five percent charge for withdrawal and three percent charge for deposit on those with corporate account.
I see this as broad day light robbery not withstanding that they said it is for cashless society to take effect, mind you bank charges on withdrawal and on deposit. Why will the CBN come up with this policy, is it to encourage people to save in the bank or to discourage them.
According to the central bank of Nigeria, the new Nigerian bank charges on deposit apply to these states
The charges starts from 18th September 2019 and will spread to other states(nationwide) by March 2020.
Let’s do a calculation on the new bank charges both on personal and corporate account.
Calculation on new Nigerian bank charges
Is very unfortunate that i see business men and women hugely affected by this, and i see them coming up with an indirect tax levied upon the society(masses) to cover for it.
For Individual Account
Let me say i have N600,000 to deposit to the bank as an individual account(personal account) with the deposit fee being two percent, below us what the bank will charge me.
600,000 ÷ 100 × 2 = 12,000
600,000 – 12,000 = 588,000 remaining money
So the bank charge will be N12,000 and i will be left with N588,000. If i want to withdraw five hundred thousand from the five hundred and eighty eight thousand naira, the bank will also charge me with three percent on withdrawal.
500,000 ÷ 100 × 3 = 15000
Total amount collected for Nigerian bank charges will be 15000 + 12000 = N27000
You can’t imagine the amount each bank will be getting times the number of individuals that transact on daily basis.
For Corporate Account(Business Account)
Bank customers with corporate account are more affected by this new Nigerian bank charges. Many business owners deposit cash almost every day and they make withdrawals two to three days for payment of goods. With this you can’t imagine how much these people will be paying in the name of bank charges.
A corporate account owner that’s want’s to deposit three million, five hundred thousand naira in his or her account, with a fee rate being three percent on deposit for corporate account.
3,500,000 ÷ 100 × 3 = 105,000
So 3,500,000 – 60,000 = 3,395,000
Whopping one hundred and five thousand naira removed from the three million, five hundred thousand in the name of Nigerian bank charges and cashless policy. If the corporate account owner wants to withdraw three million naira from the remaining money or maybe to make a payment with it, the calculation will be;
3,000,000 ÷ 100 × 5 = 150000
150,000 + 105,000 = 255,000 bank charge
Very large sum of money i must say that one will pay or preferably give to the bank(cbn) in the name of cashless policy.
Imagine a business man or a woman paying such amount of money, then what’s the gain, what’s the profit accrued on a business. Seriously i see the masses paying an indirect tax because of this. The traders and businesses owners might increase the price of their products in order to cover for the bank charges.
Solution to the new Nigerian bank charges
According to the CBN, the new policy on cash-based transactions (withdrawals) in banks, aims at reducing (NOT ELIMINATING) the amount of physical cash (coins and notes) circulating in the economy and encouraging more electronic-based transactions (payments for goods, services, transfers, etc.)
So the question is how can you a business owner or a trader adapt to the new changes and avoid such charges. It goes below;
1. Using POS to receive payment
Point of sale (POS) or point of purchase (POP) is the time and place where a retail transaction is completed. The use of pos is good for those with corporate account, customers make payments direct to your bank account and this will make you not to carry cash about, or to deposit.
Getting a point of sale(pos) isn’t difficult, inquire from the bank that you have an account with and request for it. They will give you all the details and also how to use it, mind you it is not for free.
2. Direct money transfer
For individuals and also corporate account owners, money transfer is another way which you can go cashless and avoid paying the Nigerian bank charges. The new modern banking era made it in such a way that you can transfer money from your bank account to another account within or even outside Nigeria.
You can enroll for internet banking or use the mobile ussd transfer code which is offline and doesn’t require internet connection.
Traders or business owners should allow buyers to make payment through money transfer direct to their account. As long as you’ve received an alert for the payment, issue a receipt to the buyer and save yourself the stress of going to the bank to deposit cash for the day.
These two options can save from deposit bank charges, and also in terms of withdrawal. We withdraw money cause of the need to make payments. If seller’s accepts pos and money transfer, the number going to the bank to make withdrawal will reduce drastically.
Posts on money transfer in Nigeria
This is one of the reason the central bank came up with the new Nigerian bank charges, but the truth here is that these charges will only affect the masses, more especially the business owners which they might shift the cost to the masses through indirect tax(increasing price of commodities).
Cashless society is good but is it the major thing that we needed right now, we are looking at the developed countries and trying to get their banking policy to this country, why wouldn’t the federal government see the policy of adequate power supply, and salary structure and also bring that to Nigeria.
The ones that will favour the nation we avoid it, but the ones that will ripe the nation we try to bring it here, not withstanding that they are developed and we are developing. Would like to hear your say and suggestions on this new Nigerian bank charges.