CBN Advice Banks To Cut Service Cost

The Central Bank of Nigeria (CBN) has advises banks and other financial institutions to reduce the cost of providing banking services to their customers, especially the underbanked and unbanked within the society.

CBN Director, Payment System Management Department, Musa Jimoh gave the advise at the Hope Payment Service Bank opening in Lagos.

He described the cost of providing banking services to customers as ‘too high’.

Jimoh said the apex bank will be monitoring the new entrants into the banking sector- Payment Service Banks- and assess the rate at which they offer their services to customers after six months of operation.

The Payment Services Banks (PSBs) were approved by the CBN to enhance access to financial services for low income earners and unbanked segments of the market at the grassroots through digital services.

The new entrants into the banking sector are – Hope PSB, a subsidiary of Unified Payment, Globacom’s Money Master and 9Mobile’s 9PSB.

Jimoh said that affordability of banking services is very key, and that banks should think of ways to reduce their cost to serve.

He said: “Nigerians should afford banking services. The cost of providing banking services is too high. I would want a situation where the unbanked and underbanked can afford the services that the Payment Service Banks will be providing. In a year or six month time I will come back to see how whether the banks have make their cost to serve affordable to the underbanked and unbanked”.

“While we are congratulating Hope PSBank, on this milestone, there is need to make banking service affordable to the people,” he added.

Also speaking, Managing Director/CEO, Unified Payments, Agada Apochi, said telecom companies should reduce the cost of delivering digital services used by banks like the Unstructured Supplementary Service Data (USSD) channels.

He said that telecom operators charge at least N3 to use push Botton for the USSD and the fee will be taken whether the transaction was successful or not.

The CBN had on January 1, 2020 unveiled new regime of banking charges to customers.

The apex bank had instructed banks to slashed withdrawal fees usually charged after the third withdrawal from Automated Teller Machines (ATM) within the same month.

Card maintenance fee has been reviewed to N50 every three month (quarterly), from the initial monthly period. The guide released by the CBN contains major changes on electronic transactions’ charges in Nigeria.