Banks have turned the N10 million limits on cheque transactions into a money spinning avenue.In placing theÂ ban on payment of value above N10 million through cheques last year, the Central Bank of Nigeria (CBN) directed that such payment should be made through electronic payment channels.
Vanguard investigations revealed that in addition to informing customers about the electronic payment services offered for payment of transactions with values above N10 million, banksÂ have also imposed charges on such payment different from their usual charges like commission on turn over (COT). A bank for example in a statement to customers announced charges of N2000 per transfer plus 0.01 per cent fee of transferred amount subjected to a maximum of N52,000.
In the statement informing its customers of the new policy and the way it works, the bank explained that one of the e_payment options available to any customer exceeding N10 million stipulated limit is real time gross settlement (RTGS). This is an automated online payment system which allows the transfer of funds from one bank account to accounts in another bank on the same day.
The bank said in the statement that RTGS is available at any of its bank branches on working days between 8.30am and 1.00pm. Transfer requests received after the cut off time of 1.00pm will be processed on the next working day.
The other e_payment option is the Nigerian Inter_bank Settlement System Electronic Funds Transfer (NEFT) which is a non_cash credit transfer service that enables a bankâ€™s customers to transfer funds to beneficiaries in other banks. All transfers processed before 1.00 p.m. on week days are treated on the same day. Requests received after the cut off time of 1.00p.m. are processed on the next working day. The NEFT transaction fee is 0.1 per cent of the transferred amount in the bank.
Investigations reveal that the amount charged for such electronicÂ transferÂ rangesÂ from N1,000 to N5,000. Also, transfer request must be made at a specified time of the day for the money to be processed that day.
One of old generation banksÂ whose chief executive officer is due to resign by July 31stÂ charges a flat commission of N5,000 and 5 per cent VAT of the transferred money for NEFT beyond N10 million. TheÂ transfer period ranges from 8am to 12pm and, 12pm to 4pm.
One new generation bank charges N2,100 parallel fee for its NEFT also known as NIBSS and request maximum time of 11.00 am.
Another new generation bank also with its CEO due for retirement by July 31st charges a sundry charge of N1,000 for e-payment transactions beyond N10 million and N500 for transfers below N10 million and a request time of 9am before the transfer can be made that day.
One of the banks that have scale through the special auditÂ of banks collects a commission depending on the amount. For a electronicÂ transfer ofÂ N10 million and above, the bank charges N500 and a five per cent for VATÂ while for a transfer less N10 million, a commission of N200 in addition to 5 per cent VAT is deducted.
The ban on payment value in excess of N10 million was communicated to banks by the CBN via a circular titled,Â â€˜Maximum Limit on Cheque Paymentâ€™ and signed by the Acting Director, Banking Supervision the CBN stated, â€œ As a further step at enhancing the efficiency of the payment system in the country, the Central Bank of Nigeria hereby sets a maximum limit on cheque payment at N10 million with effect from January 1st 2010.
â€œTo this end, any payment value exceeding N10 million should be made through the e-payment mode such as the Central Bank Interbank Funds Transfer System (CIFTS i.e RTGS) and Nigeria Interbank Settlement System Electronic Funds Transfer (NEFT) from that date.â€œThe maximum limit serves as a risk reduction measure in the clearing and settlement arrangement in line with international best practice.
To support this initiative, deposit money banks are implored to properly educate their customers on the implementation procedure.â€ In another circular on the implementation of the ban, the apex bank said â€œIn order to avoid any ambiguity and misinterpretation of the above named policy, please note that the minimum cap of N10 million naira for a single cheque payment and other paper-based payments must be observed in respect of: 1. Cheques (to include Bank drafts and manager cheques). 2. In-house cheques drawn by all classes of account holders of the same bank and or branch. 3. Across-the -counter cash withdrawals with cheque by customers of banks.
( as already provided for by the Money Laundering Act). 4. Dividend/interest warrants. 5. All classes of cheques issued prior to the take-off date of the policy with value higher than N10 million, but yet to be paid after January 1st 2010.
Cheques in category 5 should be presented for payment within two weeks from 4th January 2010. Thereafter any cheque not presented should be recalled by drawers or returned unpaid by the paying banks with the appropriate reason. The concerned drawers should subsequently be enjoined to issued payment mandates to their bankers to do electronic transfers in favour of the payees.â€