Central Bank of Nigeria suspends fees on cash deposits until April 30, 2024, reversing charges initiated in December 2019.
The move provides relief to customers but may lead to potential revenue losses for banks.
The suspension could boost cash transactions and push banks to enhance digital banking services.
Customers are relieved and banks face potential revenue loss after the Central Bank of Nigeria (CBN) halted fees on cash deposits on Monday.
The CBN’s freeze on deposit fees lasts until April 30, 2024, as stated in their circular.
In December 2019, the CBN started charging fees on deposits over N500,000 for individuals and N3,000,000 for businesses.
The circular says all CBN-regulated financial institutions must now accept cash deposits without charging fees.
Uchenna Uzo, a retail academy director, believes the fee halt gives customers more money to save and spend.
He thinks this will lead to more spending on non-essential items.
He also says this will increase customers’ trust in banks and align with the cashless policy.
Uzo says retail businesses will benefit because they can keep more of their cash deposits.
He’s worried about the short term but sees this as a way to reduce business costs.
Uzo notes the fee suspension will push banks to find new, honest ways to make money.
Uju Ogubunka, a banking association president, says customers won’t pay deposit fees, but banks will earn less.
Eleven banks made N614.15 billion in fees and commissions in the first half of 2023.
BusinessDay found UBA earned the most from electronic banking, followed by Access Holdings, FBN Holdings, Zenith Bank, and GTCO.
Banks make money from various fees, including cash handling, so stopping deposit fees will cut their income.
Analysts say the CBN’s rule will raise banks’ administrative costs.
Banks will have to change systems and processes, and might push digital transactions to replace lost fee income.
Banks might increase interest rates to make up for lost fee income, affecting borrowers and savers.
The fee removal could encourage more people to use banks.
For big stores like Shoprite, not paying fees on large sums is a bonus.