A former President of Chartered Institute of Bankers of Nigeria (CIBN), Mr Femi Ekundayo, has lauded the Central Bank of Nigeria (CBN) for the zero Commission On Turnover (COT) policy.
Ekundayo said on Saturday in Lagos that the policy would bring more people into the banking community.
According to him, available records show that more than 60 per cent of the money in the economy is outside the banking network, a development which can be addressed by the zero COT policy.
He noted the policy which the apex bank had programmed to take effect in 2016 was part of its financial inclusion philosophy, which was aimed at attracting more people into the finance sector.
“The Central Bank of Nigeria (CBN) policy on financial inclusion is to get more people into the financial net,’’ Ekundayo said.
The financial expert explained that COT was perceived in the banking industry as a source of income to Deposit Money Banks (DMBs).
While noting that DMBs were expected to operate optimally and attract income, he said that many of them were leveraging the COT to“ drive patronage.’’
He acknowledged that zero COT would exert some pressure on DMBs at the level of implementation, but stated that the money banks knew how to make it up from other sources.
“A number of banks have been using COT to drive patronage. What the banks will lose through implementing the zero COT, they will always find a way of getting it elsewhere,’’ Ekundayo said.
He revealed that the banking community had a lot to gain through the implementation of the new policy, saying that it was a way of “giving back to the banking community.’’
He said that before now, COT varied from one bank to the other, but pointed out that CBN’s financial inclusion policy was geared towards international best practice.
NAN reports that COT is a charge levied on customers’ withdrawals by their banks. Before now, most banks charged N1 for every N1,000 withdrawn from by a customer from his account.
The “Guide to Bank Charges” implementation, which started in March 2013, has seen the COT drop to N3 per N1, 000 in 2013 and N2 per N2, 000 in 2014.
It finally dropped from N1 per N1, 000 in 2015 to Zero cost on Jan.1, 2016.
The CBN had in a in a circular titled “Implementation of Revised Guide to Bank Charges –Commission on Turnover”, said there was no going back on the implementation of the policy.
It has directed banks that charged excess COT since the effective date to refund same to the affected customers or be sanctioned. (NAN) Click to signup for FREE news updates, latest information and hottest gists everyday
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WHAT A COMMENDABLE AND LAUDABLE MOVE BY THE CENTRAL BANK OF NIGERIA! COT HAS CONSISTENTLY BEEN AN ABUSE ON THE INTEGRITY OF CONSUMERS OVER THE YEARS! YOU HAVE DECIDED TO SPEND A PART OF THE MONEY YOU KEPT WITH THE BANK, ONLY TO FIND OUT THAT WHEN YOU HAVE DECIDED TO WITHDRAW THE MONEY YOU ARE MADE TO PART WITH A PERCENTAGE OF IT TO THE BANK! I UPHOLD THE BELIEVE THAT THIS BANKING POLICY CAN ONLY BE TRACED TO THE NIGERIAN BANKING SYSTEM. I CONSIDER IT AN EXTORTION OF PUBLIC FUNDS. KUDOS TO THE MANAGEMENT OF THE CENTRAL BANK OF NIGERIA ON THIS NOTABLE MOVE.
ReplyDeleteYou're totally right! I constantly see the COT as a fraudulent charges from my bank each time I make a withdrawal. This zero COT policy is a welcome relief.
ReplyDelete