In a bid to enhance customer satisfaction and ensure prompt resolution of disputes, the Central Bank of Nigeria (CBN) has introduced stringent penalties for commercial banks, payment system service providers, and other financial institutions that fail to address customer complaints within a specified timeframe.
According to a new directive issued by the CBN, banks will face a daily fine of N100,000 if they do not respond to customer complaints within 72 hours. This measure is particularly targeted at complaints related to Automated Teller Machine (ATM) transactions, where customers often encounter delays and frustrations.
CBN’s Emphasis on Timely Complaint Resolution
The CBN has made it abundantly clear that failure to respond to customer or CBN inquiries about ATM-related complaints within the stipulated 72 hours will result in a hefty daily fine. Moreover, if a customer’s ATM transaction fails and the acquirer does not initiate an automatic reversal, the financial institution will be penalized with a total refund of the disputed amount and an additional fine of N50,000 per day.
This new directive is part of the CBN’s broader 2024/2025 monetary, credit, foreign trade, and exchange policy guidelines, which outline the standards for banks and financial institutions under its supervision. The central bank emphasized its commitment to ensuring that all entities in the payment system comply with established fees and charges, referencing the ‘Guidelines on Operations of Electronic Channels in Nigeria’ from June 2020 and the ‘Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions’ issued in December 2019.
Failure to Provide CCTV Footage Attracts Penalties
In addition to delayed responses, the CBN has also imposed penalties for financial institutions that fail to provide camera footage for disputed ATM transactions. If a bank fails to provide the required footage, it will be required to pay a penalty equal to the refunded amount. Furthermore, if an ATM does not have a camera, the bank will face an initial fine of N250,000, followed by a daily charge of N50,000 until a camera is installed.
Interest Rates and Bank Practices
Regarding interest rates for the 2024/2025 fiscal year, the CBN reiterated that they will remain market-driven, influenced indirectly through adjustments to the Monetary Policy Rate (MPR). Banks are expected to comply with several guidelines concerning interest rates on deposits. For current account deposits, interest rates will continue to be negotiable between the customer and the bank. Savings account deposits will similarly follow rates provided in the ‘CBN’s Guide to Charges’ or any future circulars or policies issued by the apex bank.
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Special-purpose deposits, such as those held as collateral, will have a minimum interest rate of 30 percent of the MPR for naira-denominated deposits, with foreign currency deposits having negotiable rates. Banks are also expected to calculate interest on loans repayable in installments using the reducing balance method, as the use of other methods like the discount or straight-line methods, which can result in higher interest rates, is not allowed.
Account Statements and Interest Calculations
Banks must issue monthly account statements free of charge to customers, which must include details of any overdrawn accounts, the amount of interest charged, and all account activities within the month. Savings deposit interest will be calculated daily and credited to customer accounts at the end of each month without any minimum balance requirement for earning interest.
The CBN also stressed that banks must ensure the accuracy of charges and interest payable on deposit accounts. In cases where errors are discovered, such as non-payment or underpayment of interest, excessive interest, or unauthorized charges, the bank is required to refund the customer within two weeks, along with simple interest at the CBN’s prevailing maximum lending rate. Additionally, a letter of apology must be issued to the affected customer, and where necessary, the customer’s account should be reconstructed. Banks failing to comply with this requirement will be subject to further penalties.
Foreign Currency Accounts
For foreign currency-denominated accounts, similar rules apply. In instances where non-payment or underpayment of interest is discovered, banks must refund the affected customer with simple interest at the CBN’s foreign currency lending rate, along with an apology. Again, non-compliance will result in penalties.
If You Ask Me
The CBN’s new directives are a clear indication of its commitment to protecting the interests of Nigerian consumers and ensuring that banks and financial institutions operate within the boundaries of established regulations. By imposing hefty fines for delayed customer complaints and other violations, the CBN aims to hold financial institutions accountable and improve the overall quality of banking services in the country.
