CBN halts fresh intervention loans application, as banks to charge 5% on withdrawals above N3m

Central Bank of Nigeria (CBN) has halted applications for fresh loans under its development finance intervention funds, just as it directed commercial banks to take responsibility for recovering those already granted.

The regulatory bank which announced this decision in a circular to chief executives of commercial banks in the country, also disclosed that it has commenced pullback from direct development financing interventions.

The circular signed by Acting Director, Development Finance Department, Sa’ad Hamidu, further announced that commercial banks are now responsible for the recovery of loans granted so far, under the development finance intervention funds.

The circular is titled; “Suspension of Acceptance of New Applications under the Existing Central Bank of Nigeria, CBN Development Finance Intervention Programme,” further stated that the regulatory institution is now ‘moving into more limited policy advisory roles that support economic growth.’

“In furtherance of the Central Bank of Nigeria’s (CBN) new policy thrust focusing on its core mandate of ensuring price and monetary stability, the Bank has commenced its pullback from direct development financing interventions.

“Accordingly, the CBN would be moving into more limited policy advisory roles that support economic growth.

“In consideration of the above, the CBN wishes to inform you that it has stopped accepting new loans applications for processing under any of its existing intervention programmes and schemes.

“It is important that you communicate this to your customers. And kindly note that the interest rates, as well as other terms and conditions on all existing facilities, remain as contained therein in their respective approval letters.

“You may also wish to note that your bank shall be responsible for the recovery of the outstanding balance on all facilities previously accessed through your bank,” the statement read.

Meanwhile, in a related development, CBN also announced suspending the processing fees on large cash deposits.

A statement to that effect signed by the Acting Director of Supervision, Dr Adetona Adedeji , disclosed that the decision will ‘remain in effect until April 30, 2024.’

According to the statement, the new development under the “Guide to Charges by Banks, Other Financial Institutions, and Non-Bank Financial Institutions” issued on December 20, 2019, with reference number (FPR/DIR/GEN/CIR/07/042), affects deposits above N500,000 for individual accounts and N3,000,000 for corporate accounts.

“The suspension shall remain in effect until April 30, 2024,” the CBN said.

The CBN had in 2019 declared that it would begin to levy bank customers making cash deposits and withdrawals as part of its efforts to reduce cash in use.

The CBN also declared that for corporate accounts, the Deposits Money Banks (commercial banks) would charge five per cent processing fees for withdrawals and three per cent processing fees for lodgments of amounts above N3,000,000.

“Consequently all financial institutions regulated by the CBN should accept all cash deposits from the public without any charges going forward.

“Please be guided accordingly,” the regulatory bank posted.