CBN Extends Suspension on Cash Deposit Fees
The Central Bank of Nigeria (CBN) has officially extended the suspension of cash deposit fees until March 31, 2025. In a letter signed by Adetona Adedeji, the Director of Banking Supervision, the CBN directed financial institutions to maintain the current suspension. The announcement, made on Friday in Abuja, affects cash deposits exceeding ₦500,000 for individuals and ₦3 million for corporate entities.
Initial Suspension and Proposed Fees
The CBN had initially introduced cash deposit fees in May 2024 but quickly suspended the implementation. The proposed charges were set at 2% for individual deposits above the threshold and 3% for corporate deposits. This suspension was initially scheduled to end by September 30, 2024. However, the new extension pushes the deadline forward by an additional six months.
Aim of the Policy Extension
The extension is part of the CBN’s efforts to support the public and businesses by ensuring easy access to banking services without extra charges. By prolonging the suspension of cash deposit fees, the apex bank aims to boost cash liquidity and ensure smooth financial operations, especially for large depositors. This decision is seen as a measure to sustain economic activities in both the private and corporate sectors.
Financial Institutions Expected to Comply
The CBN has directed all banks and financial institutions in Nigeria to continue accepting cash deposits without levying fees. This mandate will relieve both individuals and businesses, especially as the Nigerian economy recovers from inflationary pressures and financial challenges.
Impact on the Nigerian Banking Sector
The suspension of the fees arrives at a critical time as the banking sector focuses on digitisation and encourages cashless transactions. However, suspending the charges also accommodates sectors that rely heavily on cash transactions, particularly in rural areas with limited access to digital banking services.
Looking Ahead to 2025
As the CBN monitors the situation leading up to the new March 2025 deadline, stakeholders in the financial sector will adapt accordingly. The decision to reinstate or further suspend the fees will likely depend on economic conditions and how effectively the current suspension maintains financial stability.
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