ACCOUNT LIMITS AND FLEXIBILITY, KEY TO FINANCIAL INCLUSION

Last week, the Central Bank of Nigeria (CBN) issued new three tier Know Your Customers' guidelines for banks relaxing the requirements for customers to open accounts in any bank. It however placed limits on the three categories of accounts that could  be operated by a customer.

According to a circular which was signed by the CBN Director, Financial Policy and Regulation, Mr. Chris Chukwu, the apex bank has 'taken steps to ensure that socially and financially disadvantaged persons should not be precluded from opening accounts or obtaining other financial services for lack of acceptable means of identification.

'Given that the CBN AML/CFT regulation, 2009, has made provision for this class of persons, it has become expedient to issue three-tiered KYC requirements for compliance by banks and other financial institutions in order to further promote financial inclusion.'

Considering that over 64 per cent of adult Nigerians totalling about 56.3 million do not have access to financial services, Chukwu said the three-tier KYC regime seek to implement a flexible account opening requirements for low-value and medium-value account holders subject to caps and transaction restrictions.

To make account opening more flexible for the unbanked, the CBN had earlier instructed banks in the country to include the Independent National Electoral Commission's(INEC)voters' card as an acceptable means of identification for the purpose of bank transaction.

It also placed the limit of maximum single deposit amount of N20,000 and N50,000 for Low and Medium Value Accounts respectively.

Also, the apex bank pegged maximum cumulative balance for Low Value Accounts at N200,000 at any point in time and a maximum cumulative balance of N400,000 on the Medium Value Account. However, for the High Value Account, no limit was placed on cumulative balance.

The policy also categorised bank customers into Low Value Accounts (Level One); Medium Value Accounts (Level Two) and High Value Accounts (Level Three).

The circular explained that the policy became exigent after the CBN recognised that access to basic banking facilities and other financial services was necessary in achieving the policy on financial inclusion.

Chukwu in the circular advised banks to adopt the new KYC requirement adding that the proposed deposit limits were meant to reduce the risk of money laundering and financing of terrorism. He noted that the Low Value Accounts were subject to close monitoring by the financial institutions and less scrutiny by bank examiners.

Some bank customers who spoke to LEADERSHIP noted that the CBN ought to focus more on issues that would grow the economy  rather than coming up with policies every time. According to Mrs Ngozi, a customer of a first generation bank: 'The CBN should not be telling me how I can operate my account. I did not open account with the CBN but with my bank so let the bank, tell me what kind of account I can operate.'

Another customer, Tosin Olumide, said the apex bank should first see through the cashless policy which it has embarked on, adding that 'once that is done, they would be able to achieve more taking their policies one after the other instead of just dumping regulations on us.'

Some bank workers who also spoke to LEADERSHIP said they were not aware of the circular or the contents. They maintained that their banks operate with the KYC guidelines earlier set by the CBN.

Another respondent noted that with the recent complexities in the banking industry, she has considered returning to keeping cash at home. 'Every time you enter the bank, there is always one new policy that will cause you one stress or the other.

' Sometimes I even prefer to keep my money at home, but when you are doing business and you have to make a lot of transactions, you just have to have a bank account, that is why I still operate my account.'

Towing the line of thought that the CBN ought to focus more on macro-economic issues, the chief executive of MaxiFund, Okechukwu Unegbu, noted that the apex bank was micro managing the banks.

According to him, this ought not to be as the banks should be able to determine the level each account falls into since they carry the risk. He stated that the CBN was violating the principles of banking by intervening in micro issues which ought to be dealt with by the banks.

'I think the CBN is doing the work of the conventional bank and what they are doing now is micro managing the banks. All the principles of banking have been thrown aboard, and I'm a little worried,'he said.