CBN ends minimum account balance for depositors

The Central Bank of Nigeria, CBN has mandated banks in Nigeria to make zero naira the minimum account balance for new account holders.

Contained in the apex bank’s new monetary, credit foreign trade and exchange policy guidelines released this week, 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.

It has been a culture in the Nigerian banking industry for account holders to reserve specific amount of money known 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.

“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.

 

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