By Obinna Chima, This Day Live
In line with its desire of achieving financial inclusion in the country, the Central Bank of Nigeria (CBN) said it is currently reviewing the various bank charges in the country.
In fact, the apex bank said it’s ‘Guide to Bank Charges,’ which was issued to the industry several years ago was with a view to reducing the amount charged on customers’ account.
CBN Deputy Governor, Financial System Stability, Dr. Chiedu K. Moghalu, made this remark at the 2011 global policy forum of the Alliance for Financial Inclusion (AFI), in Mexico, a copy of which was e-mailed to THISDAY last night.
There had been complaints of high and multiple bank charges in the country over the years.
Moghalu whose speech was titled: “Towards a More Inclusive Financial Future: The Nigerian Perspective,” maintained that in reviewing and updating the regulatory document, the apex bank would give special consideration to financial inclusion, “in particular, consumer protection, unit cost of banks, and contemporary developments in Nigeria’s banking industry”.
He explained: “Commercial and other banks need to be key partners to central banks and stakeholders in financial inclusion, even if for reasons of enlightened self-interest. In this context, there is a need to take a different approach to bank charges and fees to customers. Banks should bear financial inclusion considerations in mind in developing business models and products. While it is recognized that their unit costs are high, banks should avoid charges that can be perceived as predatory or extortionist and have the effect of excluding low-income customers or eroding the savings of depositors.
“The CBN is committed to achieving the goal of financial inclusion, leveraging on its on-going reform of the banking sector, its convening influence as the apex regulator in the financial system, and in collaboration with other stakeholders. The Bank will play a key leadership role in this context, believing that achieving financial inclusion is how the financial system of a developing country can best add value to the economy, and inspired by the commitment and achievements of other developing country central banks such as Kenya, Peru, Malaysia and others in this area.”
According to Moghalu, since financial inclusion had become a global agenda, the apex bank would leverage on the initiatives and experiences of other countries as well as the AFI, to develop workable strategies for achieving sustainable financial inclusion in Nigeria.
“This is a global challenge, for the global average of financial inclusion levels, that is, adults that have access to financial services, is only 46 per cent. The problem is even more acute in developing countries and in Africa in particular. Finance is thus, rather like the proverbial water that is supposedly everywhere, but much of mankind cannot find a drop of it to drink. Imagine, then, the possibilities for the creation of wealth and reduction of poverty that exist if billions of men and women in developing countries that are excluded from financial services were to have access to banking, insurance and other financial services suitable to low income earners.
“A burst of savings, credit, production, consumption and general intermediation would be unleashed at the bottom rung of societies. This is the imperative or raison d’etre of financial inclusion: financial services ought not to be exclusive preserve of a few, for the wealth of nations is limited, or at least is non-inclusive, when so many people, do not have access to either a bank account or basic insurance products. The dearth of access to financial services by billions of adults all over the world poses serious challenges to global economic growth and development,” Moghalu added.