• Banks are contending with many customers as old note allotment operators
• Some old records have been destroyed, sources claim
In the face of protests over rising financial services transaction fees, deposit money banks (DMBs) have increased electronic money transfer (EMTL) charges to domicile accounts.
The new levy came into effect immediately, according to communications seen by The Guardian. The levy, settled by banks on behalf of the government, was previously restricted to naira accounts.
But banks have informed customers that the fee, with immediate effect, applies to domicile accounts on the directive of the Minister of Finance, Budget and National Planning, Zainab Ahmed.
So, dollar or pound account holders will pay the equivalent of N50 as EMTL at the exchange rate to be determined by the Central Bank of Nigeria (CBN).
“We are writing to notify you of a new change affecting electronic money transfer transactions. The Electronic Money Transfer Levy Regulation (EMTL) was recently published by the Minister of Finance, Budget, and National Planning.
“Based on the Regulation, the EMTL levy in foreign currency equivalent to N50 is currently applicable for fund transfers to domiciliary accounts…EMTL will be applicable for qualifying entry into domiciliary accounts with immediate effect,” an email sent by the bank yesterday read. .
Usman signed the EMTL Regulation into law in 2022 with a fee of ₦50 for all deposits above ₦10,000. The electronic transfer fee is an addition to the Stamp Duty Act, which came into force through the Finance Act 2019.
The extension of fees for foreign currency accounts has arisen due to the rise of social protests over the increase in the cost of banking services, especially electronic transactions which the CBN has aggressively implemented.
The Guardian has reported an increase in the adoption rate of fintech and shadow banking, which offers cheaper services. Some fintech operators have seen an increase in the number of customers in recent weeks following an increase in the number of individuals transacting electronically.
Low transaction costs, convenience and speed are cited as the main reasons Nigerian depositors are ditching conventional banks for fintech, despite concerns about the security of depositors’ funds in digital wallets held in the first digital banks.
Interestingly, the pressure is starting to reduce the efficiency of fintech companies, which are vampires in the ecosystem. Therefore, the occurrence of downtime is a daily experience in the main carrier – a situation that will make the choice between the two variants more complicated for the depositors.
Meanwhile, banks across the country are finding it difficult to keep the crowd under control as demand for cash continues to grow.
While more banks in Lagos and other cities are involved in issuing some of the old N500 and N1000 notes in the vaults, managing the queues inside and outside the banking rooms has become a major challenge.
In some parts of Lagos, banks rely on volunteers to maintain sanity in their premises.
The operators seem to have been punished as a result of not getting a clear directive from the regulator and tied to the pressure of the desperate depositors. Like yesterday, more operators are paying over-the-counter, although transactions are still limited to N10,000 in most cases while some offer N20,000.
But as the old notes enter the economy, even in small quantities, some traders insist they will hear from President Muhammadu Buhari before they start accepting the notes, which the Supreme Court said will remain valid until the end of the year.
Amidst the ongoing shortage, The Guardian leant yesterday that if it does not wait for the arrival of the President to decide the recirculation of money taken from Nigerians, the CBN may be limited by the volume of cash that has been destroyed.
“It was also announced a few weeks ago that the CBN had burned some old naira notes that were initially kept. Although it was for the benefit of hindsight now, it appears that the move has backfired. The Supreme Court has ordered the CBN to restore the old notes, the CBN has burned the old notes,” sources said.
With banks in limbo and confused, unavailability of old and new notes is a major challenge.
A banker expressed his frustration in an interview with our correspondent, saying: “We don’t even know what is happening. The head of the bank is not talking. There is no directive from the headquarters and no one knows the real situation. Bank executives and managers are issuing conflicting directives like given by reality in its branches.
On the availability of old notes in bank vaults, he said: “There are no old notes anymore because the CBN has taken them from the banks into custody. The CBN has not issued the new notes to the banks, that’s the rationing they are doing.
In Abuja, transport fares, as well as grocery prices, have increased as taxi drivers and sellers now charge for motorbikes and buyers now charge higher.