Electronic money transfer levy (EMTL) has been extended to domiciliary accounts by deposit money banks (DMBs) in response to complaints about the escalating transaction fees of financial services.
According to communication messages seen by The Guardian, the new levy is effective right away. The charge, which banks carry out on the government’s behalf, was formerly limited to naira accounts.
However, banks informed their clients that the fee would begin to apply to domiciliary accounts immediately pursuant to a decision from Zainab Ahmed, the Minister of Finance, Budget, and National Planning.
Therefore, a dollar or pound account holder would thereafter pay an equivalent of N50 as EMTL at an exchange rate to be decided by the Central Bank Of Nigeria.
“We write to notify you of recent changes impacting electronic money transfer transactions. The Electronic Money Transfer Levy (EMTL) Regulation was recently issued by the Minister of Finance, Budget, and National Planning.”
“Based on the Regulation, the EMTL levy at the foreign currency equivalent of N50 is now applicable on the transfer of funds into domiciliary accounts… EMTL shall apply to qualifying inflows into domiciliary accounts with immediate effect,” an email sent by a bank yesterday reads.
In 2022, Usman officially passed the EMTL Rules, which impose a 50 fee on any deposits over 10,000. The Stamp Duty Act was expanded by the 2019 Budget Act to include fees for electronic transfers.
After a rise in social unrest over the increased cost of banking services, notably electronic transactions that the CBN is vigorously enforcing, the charges have now been extended to foreign currency accounts.
The popularity of shadow banking and fintech, which provide more affordable services, has increased, according to The Guardian. With the increase in people conducting business online, certain fintech companies have experienced a spike in membership numbers in recent weeks.
Notwithstanding worries regarding the security of depositors’ money on digital wallets held by digital-first banks, low transaction costs, ease, and speed are cited as the main reasons Nigerian depositors are choosing fintech over conventional banks.
Fintech companies are evolving into the ecosystem’s vampires as a result of the strain, which is an interesting development. As a result, downtime events are becoming commonplace among the top operators, which will make it harder for depositors to decide between the two options.
While the demand for cash continues to rise, banks all around the country are struggling to maintain manageable crowds on their property.
Whereas many banks across Lagos and other cities engaged in issuing the few old N500 and N1000 notes in their vaults, handling queues in and outside the banking rooms has become a huge concern.
Banks in various areas of Lagos rely on volunteers to keep order on their property.
Because they are subject to the pressure of anxious depositors, the operators appear to have damned the repercussions of not receiving a clear order from the regulator. As of yesterday, more operators were making cash payments over the counter, while most transactions are still limited to N10,000 and a select handful are making N20,000 payments.
The Supreme Court ruled that the old notes are still valid until the end of the year, but even though they are entering the economy in modest amounts, some traders claim they must first hear from President Muhammadu Buhari.
The Guardian reported yesterday that the CBN may have been limited by the amount of cash allegedly destroyed, aside from waiting for the President’s arrival to deliberate on the recirculation of the money collected from Nigerians.
“It was well advertised a few weeks ago that the CBN had burnt some old naira notes that were initially deposited. Though for the benefit of hindsight now, it appears that the move has backfired. The Supreme Court has ordered the CBN to restore the old notes, the CBN had burnt the old notes,” a source claimed.
The lack of both the old and new notes is proving to be a significant difficulty, leaving the banks in a state of uncertainty and confusion.
In an interview with our correspondent, a banker vented his fury, saying: “We don’t even know what is going on anymore. Heads of banks are not talking. There are no directions from headquarters and no one knows the genuine state of things. The bank executives and managers are issuing conflicting directives as dictated by the realities in their branches.”
On the presence of old notes in bank vaults, he said: “There are no old notes anymore because the CBN had taken them from the bank into its custody. The CBN has not released new notes to the banks hence the rationing that is going on.
While taxi drivers and vendors now charge drivers and buyers more, the cost of transportation in Abuja as well as the cost of consumables has increased dramatically.
