CBN Re-Introduces C.O.T Charges


The Central Bank of Nigeria (CBN) has reintroduced C.O.T charges for commercial banks just weeks after implementing the no C.O.T charge rule in 2016. The Bank in a circular titled “Introduction of Negotiable Current Account Maintenance Fee” .

According to the CBN, banks can now charge what it termed a “negotiable current account maintenance fee not exceeding N1 per mille. This in effect means banks can charge C.O.T not exceeding N1 per every N1000 or 0.1% for transactions in your current account. By including the term negotiable, the CBN is essentially giving banks the option to charge either higher or less or nothing at all in the hope that it will foster competition.


Ironically, large corporations have always negotiated lower C.O.T’s for themselves in the past leaving small businesses and startups to pay the full value. In making its decision to reintroduce the fee the CBN is believes the drop in oil prices and the introduction of the TSA may have limited the value and volume of transactions banks will make this year. Some analysts put the total portion of C.O.T’s in some banks to about 20% of their non interest income meaning that a removal could jolt the banking sector.



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