CBN Gives Banks 2-Week Deadline to Refund Excess Charges

Central Bank of Nigeria (CBN) has said that any bank that underpays and or charges its customers excessive interest and other charges will refund the amount involved within two weeks of the discovery/ customer complaint to the bank, with interest at the lender’s prevailing maximum lending rate from the date of such underpayment up to the date of refund, along with a letter of apology to the customer.

The apex bank stated this in its recently released monetary, credit, foreign trade and exchange guidelines for fiscal years 2016/2017.

According to the regulator, “each bank shall continue to be responsible for cross-checking its charges and interest rates payable on deposit accounts.

Where the bank discovers a non-payment or under-payment of interest on deposits, other entitlements, excessive interest, and bank charges, a return/report thereon shall be made to the CBN within two weeks from the date of discovery by the bank or date of receipt of customer’s complaint.

“Under-payment and/or excessive interest and other charges shall be refunded within two weeks of the discovery/ customer complaint to the bank, with interest at the bank’s prevailing maximum lending rate from the date of such underpayment and/or excessive interest up to the date of refund, along with a letter of apology to the customer.

Any bank that fails to comply with this provision shall, in addition to the refund to the customer, be liable to a penalty as may be prescribed by the CBN.” The guidelines further stipulated that banks are to pay negotiated interest rates on current account deposits, adding,

“Where special purpose deposits are held for more than seven days, banks shall pay interest at a rate negotiated with the customer.”

In addition, the CBN stated that banks are to render a statement of account promptly to each account holder, on a monthly basis free of charge, which will include: rates of interest on over-drawn accounts, the amount, the period and details of operation of the account during the month.

As the banking watchdog put it, “interest on savings deposit shall continue to be calculated on a customer’s account as at the end of each month. Any accrued interest shall be credited to the account on due date,” adding,

“The balance on a personal savings account on which interest is payable is not subject to any threshold.”

The CBN also stated that banks must design their savings pass books (manual/electronic) in a way that clearly shows the applicable interest rate, savings balances on which interest calculation is based and the period for which interest is calculated and paid.

Similarly, the CBN warned that banks to fail to remit Custom Duties, Value Added Tax (VAT),and other revenue collections on behalf of the Federal Government, on a daily basis, in accordance with the circular on Treasury Single Account (TSA)/e-collection issued in August, 2015 within the specified period will pay interest for late remittance.