The House of Representatives has mandated the Central Bank of Nigeria (CBN) to order Deposit Money Banks (DMBs) to refund all Commission On Turnover (COT) charges this year or face severe penalties.
It was gathered that the order is a consequence of the alleged failure of banks to comply with the CBN’s directive on zero COT. Apparently dismayed by the development, the House, which urged compliance within 30 days, further directed the CBN to ensure full implementation of the zero COT by commercial banks.
At the resumed session yesterday after the Christmas and New Year breaks, the House also mandated its Committee on Banking and Currency to ensure compliance with the directive and report back to the chamber within four weeks
The resolution followed the members’ adoption of the prayers of a motion introduced on the floor of the House yesterday by Edward Gyang Pwajok (PDP-Plateau) who noted that the CBN in 2013 released the guidelines tagged “Guide to Bank Charges” which gradually phased out COT in Nigeria.
Leading debate on the motion, Pwajok, quoting from the “Guide to Bank Charges”, said “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.”
The lawmaker told the House that the zero COT policy, which is meant to alleviate the suffering of citizens and boost the economy by encouraging transactions through the banks, is not being implemented to the detriment of the economy.
He 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 allegedly because the CBN has not issued any formal circular directing implementation of the zero COT.
Pwajok revealed 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 well received by the public, is being flagrantly ignored and undermined by commercial banks with attendant costs on ordinary citizens who are bank customers.