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New customers should open account with zero amount – CBN


The Central Bank of Nigeria, CBN, Tuesday, ordered all banks in Nigeria to allow new customers to open account with zero amount to attract more people into the banking system.

Usually banks request new customers to open account with a specific amount of money reffered to as minimum account opening balance.

But the CBN in the new monetary, credit foreign trade and exchange policy guidelines released this week said that banks should no longer request for such amount of money.

It said, In line with the financial inclusion initiative, banks shall be required to demand zero balances for opening new bank accounts so as to make banking services accessible to the unbanked public.

“Accordingly, banks are encouraged to develop new products that would improve access to credit. Banks are, therefore, required to simplify their account opening processes, without necessarily compromising the Know Your Customer (KYC) requirements.”

The apex bank also disallowed banks from adopting any interest rate calculating method that can result into customers paying higher effective interest rate. It also said there should be no ceiling on balance on savings account for payment of interest rates.

The policy stated, “Banks shall continue to pay negotiated interest rates on current account deposits. Where special purpose deposits are held for more than seven days, banks shall pay interest at a rate negotiated with the customer.

The reducing balance method shall be used for calculating interest charges on loans repayable installmentaly. The use of any other method for calculating interest on loans payable in agreed installments, such as the discount method of the simple interest straight line method; that would result in the payment of higher effective rates of interest than the contracted rate is not allowed.

“A Statement of Account shall be rendered promptly, to each account holder, minimally, on a monthly basis free of charge and shall include: Commission on Turnover (COT); Rates of interest on over-drawn accounts, the amount and the period; and   Details of operation of the Account during the month.

“Interest on savings deposits 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 at the due date. The balance on a personal savings account on which interest is payable is not subject to any ceiling.

“Banks shall continue to design their Savings Pass Books (Manual /Electronic) in a way that clearly shows the interest rate applied, Savings balances on which interest calculation is based, and the period for which interest is calculated and paid.

“The Inspectorate Department of each bank shall continue to be responsible for cross-checking bank charges and interest rates payable on deposit accounts. Where the Department discovers a non-payment or under-payment of interest on deposits, other entitlements, excessive interest and bank charges, a return thereon shall be made to the Central Bank within two weeks from the date of discovery by the Inspectorate Department of the bank or date of receipt of customer complaint.”


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