Nigerians To Start Paying For Failed Bank Transactions

Nigerians will have to start paying for failed transactions according to a controversial directive from the Central Bank of Nigeria (CBN). The CBN ordered banks to deduct the accounts of their customers whenever they carry out a transaction which end up to be a failed one as the financial institution is looking to curb failure to meet bank agreement.

The failed transaction charge will be placed on account of customers that enter into an agreement with bank over a transaction, but fail to fund their account when the bank move to debit such customer for the transactional agreement. in essence, if a customer agrees for a bank to deduct certain amount from their account on an agreed date, but the account is unfunded on the said date, the bank will charge - in a manner of fine - for failed transaction.

Such agreement is called direct debit, which gives a third party the authority to deduct from a person's account. CBN directed banks to charge 1% of the agreed amount or deduct NGN5,000 (depending on which is higher) for the failed transaction whenever the account is funded.

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While some banks are yet to inform their customers, Stanbic IBTC have sent a notice to their customer, informing them of the new directive from the regulator of the financial market in Nigeria. It is unsure if this also applies to Fintech companies offering loan and payment services.

In an email sent to their customers, Stanbic IBTC disclosed, “In line with the Central Bank of Nigeria’s (CBN) Guide to Charges, a failed direct debit transaction resulting from an unfunded account is liable to a charge of 1% of the transaction amount or N5,000 – the higher amount is applicable,” the email read.

“While this penal charge is only applicable if a customer’s account is insufficiently funded at the time of the transaction, the qualifying amount shall be debited to customers account once it is funded.

“We, therefore, wish to advise that you ensure your account is adequately funded at all times to facilitate a successful transaction, especially if you activate any form of direct debit instruction on your account.”