Reps Order Banks to Refund COT or Face Penalties

Central Bank of Nigeria (CBN) has been mandated to order deposit money banks to refund all Commission on Turnover (COT) charges this year or face severe penalties.

House of Representatives which urged compliance within 30 days, further tasked the financial regulator to ensure full implementation of the zero COT by commercial banks.

The resolution followed the adoption of a motion brought to the floor yesterday by Hon. Edward Gyang Pwajok (PDP-Plateau) who noted CBN buildingthat the CBN, in 2013, released the guidelines tagged “Guide to Bank charges” which gradually phased out COT in Nigeria. Leading the debate on the motion, Pwajok said, according to the guidelines, “COT was reduced to N3 per N1,000 in 2013, N2 per N1,000 in 2014 and N1 per N1,000 in 2015 while it will be phased out in 2016.”

He said the zero COT policy, which is meant to alleviate the suffering of citizens, boost the economy by encouraging transactions through the banks, is not being implemented to the detriment of the economy.

The lawmakers further told his colleagues that the CBN zero COT policy, which according to him, is in tandem with international best practices, is not being implemented by commercial banks because the apex bank has not issued any formal circular directing implementation of the zero COT.

Pwajok stated that findings showed some banks have continued to charge above N1 per N1,000 turnover that was effective from January this year.

“It was learnt that in some banks, the amount charged as COT depends on the customers’ relationship with the banks,” he said. He further lamented that the laudable policy by the CBN, which was wellreceived by the public, is being flagrantly ignored and undermined by commercial banks with attendant costs on ordinary citizens who are bank customers.

The motion was unanimously adopted by members when Speaker Yakubu Dogara, who presided over the session yesterday, put the question for a voice vote. Meanwhile, the speaker has made case for a review of the CBN policy on foreign exchange.

Dogara noted that “recent monetary and fiscal policies aimed at preventing money laundering and protecting our currency, though no doubt well intentioned, have resulted in avoidable hiccups in our international financial transactions with multifaceted counterproductive implications for both commerce, foreign investor promotion and diaspora Nigerians including students.”

“This is a matter of urgent national importance requiring all hands on deck. Accordingly, the House Committees on Banking and Currency; Finance; Diaspora and both Basic and Tertiary Education are hereby directed to quickly put their heads together and collaborate with the relevant executive agencies to expeditiously resolve the prevailing bottlenecks in our foreign exchange regime,” the speaker said.