What You Should Know About the Bankers' Tariff
By Acceler8now.com Investment Education Team
6th September, 2007
You must have heard about the bankers' tariff before, haven't you? If you haven't, it's possibly because you haven't operated an account with a bank or haven't really kept your ears close to the ground. It will possibly suggest, too, that you are not paying sufficient attention to the various charges to your account, because, if you have ever had cause to complain about any charge before now, someone in the bank would probably have referred to the bankers' tariff as the basis for their charge. If you do not scrutinise the charges made to your account, how would you know if you have been charged for a service you didn't use or overcharged for a service you used? It's interesting to note, too, that the instrument does not relate to bank charges only. It also extends to some credit items like interest payment on your account, indicating how the credit interest rate on major account types should be determined. Whether it is the commission on turnover (COT), charges on letters of credit, interest on credit facilities or foreign exchange transaction fees and more, the bankers' tariff has some guide which, as a bank customer, you ought to be familiar with.
What the Tariff Is
The banker's tariff is a chart of fees, charges and, as stated above, some income items relating to customers bank accounts, as agreed
by banks and the Central Bank of Nigeria, under the platform of the Bankers' Committee. The Bankers' Committee is an apex policy organ of bank chief executives and the CBN leadership, which meets regularly on a monthly basis, where issues concerning the banking industry and operational framework for banking services are discussed and harmonised. The bankers' tariff is a mutually agreed tariff structure, designed to ensure some market sanity and obviously to protect the banking public, which we know to be less than adequately informed in our environment. It is not just designed as a recommendation, it is a binding tariff structure, which the CBN monitors banks' compliance with. Though this would appear to undermine a free market spirit, it can sufficiently be explained by that need to have a framework that a population with a sizeable illiteracy level can find workable. The tariff is revised from time to time, to reflect the changing dictates of a dynamic market environment. The version currently in operation was released in 2004.
Upper Limits
It is obviously because of the need to avoid stifling competition that the tariff only prescribes upper limits. In effect, it does not debar banks from going below that limit and this they often do. Banks are free to reduce the rates to any level for their customers, but not to charge above the limit. Even in specifying the ceilings, the tariff is quite selective, as many of the listed chargeable items are tagged as 'negotiable', allowing banks and their customers to come to agreement on the levels of such fees and charges.
What you are likely to find, in practice, is that customer accounts are set to the maximum as default and it's only those that request and bargain for a "concession" that can get a moderated rate. Granted that such reduction is usually hinged on account performance, do not assume that if your performance justifies a certain level of reduction by your bank's standards, they will automatically adjust your figure if you don't ask. Most times they won't. It's only the knowledgeable customer that makes a case who gets an adjustment. It is therefore your responsibility to yourself to see where you can shave off a few percent points that can, over time, aggregate to a lot of saving.
Areas covered in the tariff are grouped into 10 sections, as follows:
Obviously, this is a guide that affects what you get charged for certain services in a bank and one that directly affects your pocket. You should be familiar with it. What should be clear to you, too, is that banks do not just throw charges at you; there is a 'bible' for the fees they charge. At the same time, it is good to know that certain fees are not sacrosanct. They are listed as negotiable. Even for fees where a rate is stated, that is only a maximum, meaning that banks should not exceed that level, but they cannot go below it. So when a bank officer tells you "it's what the bankers' tariff specifies", its' good you understand that statement in its proper perspective. You can ask for a reduction.
The full tariff structure can be accessed here either as an html document or in pdf format. It is advisable you spend some time to acquaint yourself with what the tariff says and to apply that as a working tool in evaluating the charges that you receive for your transactions.
|
|
