Fakoyejo OlalekanThe Central Bank of Nigeria (CBN) has suspended deposit fee or bank charge, and this will serve a huge blow on the revenue of over 10 commercial banks operating in the country.
CBN Governor, Godwin Emefiele, had disclosed the suspension during a special briefing on Wednesday, stating that only deposits of N150,000 and above will attract bank charges.
Join our WhatsApp ChannelAccording to Emefiele, Nigerians can now deposit N1 billion or N10 billion without deposit fee of N50 stamp duty and 7.5 per cent value added tax (VAT), as long as the payment is kept below N150,000.
The central bank chief said, “Bank charges (on deposits) have been suspended. What we have right now is that if you pay N150,000 into your account, you do not incur charges, but if you pay more than N150,000, you pay the charges.
“This means it does not limit you from paying N10 million or N1 billion into your account. The only thing is that you will pay for cash processing for deposits above N150,000.
“So, what we’ve done by this is to say, even if you want to pay N1 billion [or] N10 billion into your account, you are not going to be charged any money,” he said during the briefing.
CBN’s decision is expected to affect the topline and bottomline of the likes of Guaranty Trust Bank (GTBank), Ecobank, Access Bank, Zenith Bank, Stanbic IBTC and other financial institutions.
Deposit Charge is one of the many revenue sources of the commercial banks who are still recovering from the COVID-19 pandemic shock to their earnings, and still trying to find their pre-pandemic footing.
In H1 2022, Prime Business Africa understands that the industry generated N3.14 trillion revenue in H1 this year, recording a 22.61 per cent year-on-year growth when compared to the N2.56 trillion of previous period in 2021.
The banks also recorded 14.30 per cent growth in net profit in H1 2022, reporting N575.59 billion, which surpassed the N503.56 billion posted as profit after tax last year first half.
Exclusion of bank charges for deposits of N150,000 and below could tank the turnover of the industry or slow the growth in the fourth quarter of 2022 and going into Q1 of 2023.
While this might dip the earnings of the lenders, it will also motivate naira hoarders to deposit their stashed away cash into the financial system, considering N2.7 trillion of the N3.3 trillion notes in circulation is outside the banks, with only N600 billion in the creditors’ vaults.
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