'No more 3%' - CBN introduces crucial changes to processing charges on large cash deposits

The Central Bank of Nigeria (CBN) has issued a directive to all commercial banks, financial institutions, and non-banking institutions, suspending the processing fees previously placed on large cash deposits.

The apex bank issued the directive under a new guide issued on Monday, December 11, 2023, under the “Guide to Charges by Banks, Other Financial Institutions, and Non-Financial Institutions.”

No more processing charges on N500k and N3 million deposits

The new directive affects cash deposits of N500,000 by individuals and N3 million for corporate accounts.

The deposits previously attracted two and three-percent processing fees, respectively.

TheCable reports that the bank said it is halting the charges effective immediately, saying that the new policy will remain in effect until the end of April 2024.

The move is a poignant shift in post-Emefiele-led CBN and is a response to the changing financial landscape in Nigeria.

Analysts laud CBN's move to end cash scarcity

The new order mandates financial institutions to comply by removing charges on cash deposits that meet or exceed the thresholds.

Analysts believe the move is to allow Nigerians to deposit more cash amid reported cash scarcity.

Banker and financial analyst Tony Ijeh said the move would encourage Nigerians to hoard large amounts of cash to send to the banks.

“You know there is a slight cash scarcity, and CBN knows that most of these funds are kept in people’s homes. So, the move is smart to allow people to deposit more cash.”

In 2019, the apex bank announced that it would start charging bank customers making large deposits and withdrawals beginning September 19, 2019.

The circular by the bank disclosed that the new policy was designed to reduce currency in circulation.