Banks To Pay 3% Interest On Savings Accounts

A new  Central Bank of Nigeria (CBN) guidelines has prescribed of three per cent per annum as minimum interest rate on savings accounts, while interest on current account balances are to attract 0.5 per cent per annum.
The apex bank made it mandatory for all banks to pay interest on current account balances of N500,000 and above also said the new 3 per cent minimum for savings accounts was to promote savings habit in the country.
A draft of the “Revised Guide to Bank Charges” released by the apex bank over the weekend also benchmarked lending rates to the Monetary Policy Rate (MPR) stipulating a maximum of MPR + 8 per cent across the board, which translates to 20 per cent currently.
As at now, banks are at liberty to fix their own deposit and lending rates. Currently, only two banks, only two banks – Standard Chartered Bank and Diamond Bank – pay above the stipulated minimum, 3.50 and 3.25 per cent per annum respectively as interest on savings accounts. Two other banks, - Enterprise and Unity Banks pay three per cent while other banks pay between one and 2.50 per cents.
The revised guide also increased charges for bank draft to N300 and N500 per draft for current and savings accounts respectively for bank customers while non-customers are to pay N500 plus COT. This  is against the N200 flat rate for customers and N200 plus 1 per cent cash handling charges for non-customers, previously applicable.
Other key point of the revised guide is the cancellation of the N500 charge for reactivation of accounts.
According to the CBN, the review of the guide to bank charges became necessary to align the tariff in the banking industry with present economic realities and offer a platform for standard application of charges on different types of banking products and services, more so since the previous one has been in use since January 2004.
The revised guide also stipulates the minimum information banks are required to disclose to customers prior to the consummation of every credit transaction.
“The overarching goal of the review is to produce a guide that is collectively owned by all the stakeholders in the banking industry with the concomitant feature that it would accommodate the freedom of operators to charge competitive prices, while protecting consumers from arbitrary and excess charges,” said the apex bank in the note accompanying the draft revised guide.
Other highpoints of the revised guide included the reduction in COT from N5 per mille to a maximum of N3 per mille, while SMS alerts have been fixed at N5 per SMS, among others.
The CBN stated that, in view of the need to carry operators and other stakeholders along, coupled with the desire to uphold the spirit of cooperation among regulators, it is essential to expose the draft guide for the comments of relevant stakeholders prior to its release to the industry.