By Richard ABANGWU InvestAdvocate

Lagos (INVESTADVOCATE)-The Central Bank of Nigeria (CBN) has planned to phase out Commission on Turnover (COT) by year 2016 according to a Revised Guide to Bank Charges.

This is contained in a circular with reference number: “FPR/DIR/GEN/CIR/03/002, dated March 27, 2013, and signed by I.T Nwaoha Acting (Ag) Director Financial Policy and Regulation Department of the CBN.

The Circular posted on the CBN’s website and addressed to all Banks and Discount Houses reads thus:  “The Guide to Bank Charges first issued in 2004, was meant to provide a standard for the application of charges in the Banking Industry, and to minimize conflicts between Banks and their customers. Overtime, it was observed that the various charges in the Guide had become out of tune with current realities in the Market, and some provisions/terms in it allowed room for ambiguity and conflict.

In order to reflect current developments in the Market and to 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, Financial Experts/Consultants and considered inputs received from other stakeholders to produce the Revised Guide to Bank Charges. To reduce ambiguity in loan transactions, minimum disclosure requirements for loan contracts have been stipulated, in addition to the glossary of terms provided.

The Revised Guide to Bank Charges is hereby issued, to serve as a regulation on applicable charges for Banking Services and products offered to customers. It replaces the Guide to Banking Charges issued in 2004” the Circular said.

According to the CBN, COT applies to customer induced debit transaction on current Accounts and directed that the Banks should not charge COT on returned outward clearing cheques, reversal of transactions and all Banks induced debits.

The CBN affirmed that Gradual phase out of COT from N3.00 (2013) to N2.00 (2014), N1.00 (2015) and N0.00 (2016).

“Negotiable subject to a maximum of N3.00, N2.00, N1.00 per mille in 2013 2014, and 2015 respectively; while COT is free from 2016” the CBN said.

On other charges, the CBN affirmed that interest on deposits, Savings deposit Account will be minimum of 30 percent (30%) of Monetary Policy Rate (MPR) Per Annum.

The CBN said the rates on internal transactions within Nigeria, Bank Draft /cheques for customers Current Account will be N300.00, Savings N500.00. While Non customer will pay N500.00 plus COT.

Customers on Electronic Funds Transfer below N500, 000, are to pay N70.00. From N500, 000 to N1million will attract N100.00 and above N1 million will pay N500.00.

Banks are to charge customers an Annual Maintenance Fee on Foreign Currency denominated cards of N3, 000.

The CBN says the Revised Guide to Bank Charges takes effect from April 01 2013.

Click here to download Revised Guide to Bank Charges-CBN