CBN Set to Refund 35M BDC's Mandatory Caution Deposit

The Central Bank of Nigeria (CBN) has directed all Bureau De Change operators in Nigeria to apply for a refund of their mandatory caution deposit of N35 million kept, while it retains the N1 million licensing fee. 
The bank made this known in a circular to all licensed operators in Nigeria titled, “refund of mandatory caution deposit” and signed by the Director, Financial Policy and regulation Department at CBN, Kevin N. Amugo.
“Given the recent development in the operations of BDCs in the economy, the CBN has decided as follows: the refund of Mandatory Caution Deposit of N35 million to all BDC operators; the retention. Of N1million licensing fee
“Therefore, all eligible BDCs. May wish to apply for refund of their caution deposits, attaching evidence of payment and bank details,” it stated.
This is even as the apex banking sector regulator has a current account maintenance Fee not above N1 per N1000 for debit transactions initiated by a customer. It also reminded all deposit money banks that that the 2016 zero Commission on Turnover (COT) has come into effect.
In a separate circular to all banks titled: “introduction of negotiable current account maintenance fee not exceeding N1/Mille, the CBN said it noticed that while the gradual phase out was being observed, some banks continued to charge account maintenance fees in addition to the reduced COT rate, which in effect amounted to double coincidence of charges. 
It said the bank did not forget the impact of declining operation of Treasury Single Account, adding that other market turbulences on the viability and stability of the banking system. 
The circular thus read in part: “in furtherance of the mandate to promote and safeguard a sound financial system in Nigeria, banks are by this circular reminded that the 2016 zero COT regime as jointly agreed during the 311th Bankers Committee meeting of February 12, 2013 has come into effect.
“In the interest of stability of the banking system, a negotiable current account maintenance Fee not exceeding N1.00 per mille may be charged in respect of all customer induced debit transactions.”
It should be remembered that for commercial banks in Nigeria, a COT of N2 is charged on every N1000 that is drawn from a current/corporate account. Apart from the COT. 
The “Guide to Bank Charges” implementation, which started in March 2013, has seen the COT gradually drop to N3 per mille in 2013; N2 per mille in 2014; and N1 per mille in 2015 to Zero COT per mille which started on January 1 2016.
The “Guide to Bank Charges” is an initiative of the CBN to reduce charges widely seen by bank customers.
In a circular titled: “Implementation of Revised Guide to Bank Charges –Commission on Turnover,” posted on CBN’s website and signed by its Deputy Director, Financial Policy and Regulation Department, Franklin Ahonhai, the regulator had said there was no going back on the policy implementation.
It mandated banks that charged excess COT since the effective date to refund same to the affected customers or be sanctioned.
According to the CBN, the policy is expected to have implications for both banks and their customers as it is expected to give the regulator more power to deal with banks reluctant to lower service fees considered ‘as the highest in the world’.

Tribune