Cbn new policy on saving current and fixed deposit account

The Central Bank of Nigeria (CBN) has introduced a new policy on savings and fixed deposit accounts in Nigeria. Here are the key highlights:

Savings Account Policy:

  1. Minimum Balance Requirement: Effective from January 1, 2022, banks are required to maintain a minimum balance of N2,000 in savings accounts to avoid charges.
  2. Charges: Banks are allowed to charge a maximum of N50 per month for accounts with a balance below the minimum requirement.
  3. Interest Rate: The CBN has set a minimum interest rate of 10% per annum for savings accounts.

Fixed Deposit Account Policy:

  1. Minimum Deposit: The minimum deposit for fixed deposit accounts has been increased to N100,000.
  2. Interest Rate: The CBN has set a minimum interest rate of 15% per annum for fixed deposit accounts.
  3. Tenure: The tenure for fixed deposit accounts has been increased to a minimum of 30 days and a maximum of 36 months.
  4. Penalty for Early Withdrawal: Banks are allowed to charge a penalty of 1% of the principal amount for early withdrawal of fixed deposit accounts.

Other Key Highlights:

  1. Account Maintenance Fee: Banks are allowed to charge a maximum of N50 per month for account maintenance fees.
  2. Overdraft Facility: The CBN has introduced a new overdraft facility for savings account holders, with a maximum limit of 50% of the account balance.
  3. Digital Banking: The CBN has encouraged banks to promote digital banking channels to reduce costs and improve customer experience.

Implications:

  1. Increased Minimum Balance Requirement: The new policy may lead to increased minimum balance requirements for savings accounts, which may affect low-income earners and small businesses.
  2. Higher Charges: The policy may result in higher charges for accounts with balances below the minimum requirement, which may negatively impact customers.
  3. Increased Interest Rates: The policy may lead to increased interest rates for savings and fixed deposit accounts, which may benefit customers who maintain high balances.

Overall, the new policy aims to promote financial inclusion, improve customer experience, and increase the efficiency of the banking system in Nigeria. However, it may have some unintended consequences, such as increased costs for low-income earners and small businesses.