After years of groaning by banks' customers over arbitrary charges on cost of transactions (COT), the Central Bank of Nigeria (CBN) has concluded plans to peg the transaction cost at N3 for every N1,000 transacted.

Part of the clause is that the new COT regime will be a flexible one that must not exceed 3 per cent. Sources at the Central Bank said customers can negotiate COT charges between zero and 3 per cent, so that what customers will pay depends upon their negotiating power.

Before now, transaction cost was officially N5 for every N1,000 transacted. This means that, officially, the Central Bank will effectively reduce cost by 40 per cent for banks' customers. But the snag before now was that banks never adhered to the formerly stipulated N5 for every N1,000 transacted.
Most of the banks contacted could only agree that they had been compliant with the N5 for every N1,000 transacted. But most customers said they had not been aware of what had been charged them as COT.

Amid fears over the willingness of banks to comply with the proposed transaction cost, analysts said it would be great relief to bank customers who had been taken to the cleaners by banks, mostly because of their ignorance.

Central Bank spokesman Ugochukwu Okorafor said the policy will not discourage the cashless policy because of lower cost of transacting business, adding that infrastructure were being built to encourage the cashless policy.

Bismarck Rewane, chief executive officer of Financial Derivatives Company (FDC) Limited, told LEADERSHIP in a telephone interview that the move by the apex bank was a good development. In some developed climes, he said, there is nothing like COT and the banks still survive.

http://allwestafricannews..com/2012/11/nigeria-relief-as-bank-cot-is-slashed.html

Good move

Good move, but if you look at the 'bigger picture' you can bet your ass that all this silly banks will certainly pass the loss of income to their staff. How? More retrenchment or is it downsizing or right sizing!That is Nigeria for you.

CBN isn't really concerned about the cost of running the banks . . . whether you burn diesel 15hrs a day waiting for customers or not, they don't care . . . I call it ACTIVITY at the expense of PROGRESS from the CBN.

That's a good policy by CBN and I hope they make sure that all the Banks abide by it. Thou it will reduce their incomes and that will lead to retrenchment of staffs. However, the general effects will favour the customers.

At last the CBN is waking up.

However, the main issue should be reducing the cost of bank loans to stimulate economic growth, not a mere reduction in the cost of COT.

kosalabaro: Good move, but if you look at the 'bigger picture' you can bet your ass that all this silly banks will certainly pass the loss of income to their staff. How? More retrenchment or is it downsizing or right sizing!That is Nigeria for you.

eh, wetin come 'konsign' me if dem retrench everybody?

Good policy. This should encourage the SMEs. Banks will look for ways to make up for the drop in income.

Well done SLS. Please look carefully so that the banks do not take it on customers by introducing new levies and charges.

Bankers pay themselves ridiculous salaries, courtesy of COT and they wont want to give up easily. It is high time that banks, starting from their CEOs trim their pays in line with market realities.

Imagine a CEO of a Nigerian bank earning N177million per annum, in addition to a whole lot of benefits. Whereas, the CEOs of major manufacturing companies do not earn 10% of that. And you wonder why Nigeria does not manufacture anything!

Slash in COT doesnt translate to a huge loss in Profit, last i checked banks didnt keep workers only when there was profit to share, downsizing happened even with banks declaring profit. there are too many hidden charges n runs in bank operations that needs to be checked.
These banks have groups so they have other places to spur profit if they actively work on those areas, besides this reduces cost of operations for loads of companies n lead to employment too.

janvier27: It shoud not necessarily result in retrenchment, but for the fact that our bank owners and directors are very greedy, compete stupidly, and lack innovation.

I bet you bro it will surely lead to retrenchment. Aside interest on loans, COT is the surest way in which banks make their income. Imagine when your source of income is been tampered with, it is only logical to take some drastic measures in order to cushion the effect.

Good move especially as concerns the customers. The 5/mille is killing. That is why some businesses prefer to open those zero COT accounts in order to reduce charges. But the accounts still don't give u d full benefits of a current account. I for one as a businessman wouldnt mind d 3/mille. On d other hand this may lead to more illegal deductions by banks to make up for d income shortfall or retrenchment, downsizing, rightsizing and salary deduction just to stay afloat.

Standing5: CBN isn't really concerned about the cost of running the banks . . . whether you burn diesel 15hrs a day waiting for customers or not, they don't care . . . I call it ACTIVITY at the expense of PROGRESS from the CBN.

very true, I wonder if they know what it cost these banks to run, pay staffs.

You can't beat Nigerian banks! They have 1001 charges to heap on customers.

Adiministrative Charge on 'would be' debtors.
ATM renewal charge and interbank withdrawal charge.
Cheque book charge along side the COT.
Confirmation of signature for NSE charge.
Non payment of interest on Savings Accounts.
Under payment of interest on Fixed deposits.
Penalty on premature termination of Fixed Deposits.
Over charge of interest on Loan.
Fund Transfer Charge.
E.T.C

Anyway, this is good

webdezzi:

very true, I wonder if they know what it cost these banks to run, pay staffs.

40% is even fair deal. Do you know what Bank makes on daily basis? Banks collect money
that do no belong to them, still charge those that bring the money.Think about it dude.
How I wish CNB reduce it by 80% sef.

Nice move, but they should also reduce the interest rate on loans of most banks. They re not encouraging businesses at-all

In UK banks even pay interests on current accounts. There is no such thing as COT. It is only company accounts that are charged interest but companies are usually given about two year’s moratorium before such charges could be made. However if you run some types of current accounts, charges could apply if such accounts provide customers with extra services or benefits such as £2500.00 overdraft limit, travel insurance and foreign exchange purchases at no commission e.t.c. But there is usually a small monthly charge, which in most cases are about £10.00 per month and that's all the customer has to pay.

Hey! Can a bank like Zenith Bank survive this? Na COT be their main source of protein o.

bigdoo: In UK banks even pay interests on current accounts. There is no such thing as COT. It is only company accounts that are charged interest but companies are usually given about two year’s moratorium before such charges could be made. However if you run some types of current accounts, charges could apply if such accounts provide customers with extra services or benefits such as £2500.00 overdraft limit, travel insurance and foreign exchange purchases at no commission e.t.c. But there is usually a small monthly charge, which in most cases are about £10.00 per month and that's all the customer has to pay.

CBN please take a cue form this.

Also, reduce ATM fees to N50.

Thanks

Only 1 good thing this SLS madman has done for the common people.

A good move by sanusi this time.C0T reduction is good but I think ATM fee reduction or total cancellation would be better.Why do I have to pay N100 just because I need my money.
The main reason why I hate keeping my funds idle wit dem.

good move by cbn....................

Am just thinking of how many staffs of access bank and co. would be dropped,these banks should look forward to how they can cut the cost of buying diesel and think of alternative means of power, so that they can be able to bear the effect of this, and why on earth should a CEO be earning such a huge salary P.A, and they would be complaining of the cost of management, they should slash their pay, so that it can be used to balance relevant issues, just my opinion

Nice one.interest rates on loans given out by banks should be next!

OMG!!! Since 8am, This thread is still on Page one, If to say the topic Reads
CBN Approve another Islamic Bank to operate Nationally, Im sure this would have reached 50 pages, With different Pighead insulting Sanusi, Hausa Fulani & Islam for the Naija economy woe....
Crazy Hypocrites

When Is Sanusi Lamido Sanusi ternur will expire as CBN gov? I hate that man die, useless aboki man headin the ministry of money makin machine

For many years the banks have actually bleed the living daylight out of their customers with all forms of hidden charges.
With lower interest rates,businesses will grow.

KINGwax: eh, wetin come 'konsign' me if dem retrench everybody?

Wat if u keep ur stinking mouth shut? must u talk? those dat will be affected av families.. init? shioo!!

shagarri: How do you people think banks make their money??


Una no wan pay COT, yet [b]una no wan embrace cashless banking.[/b]

I bet to disagree with you. Even on cashless transaction, Nigerian banks still charge you COT.
In the last 3 weeks, I have not withdrawn more than 500 pounds through the ATM, the rest of my transaction has been through the net, I saw my GTB account statement this afternoon and it reflected N8,150 COT debit. On top of the huge debit, I was still debited additional 5% VAT on the remaining account balance.
I just dey feel like sey make I curse them

Well, he has done a good thing. May God continue to grant him more wissdom