NEW CBN POLICY: Customers are free to open accounts without deposits. cc @DrJoeAbah

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Customers are free to open accounts without deposits, the Central Bank of Nigeria (CBN) has said.

The directive is contained in the Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2016/2017 guidelines posted by the CBN on its website. 

Commercial banks ask for cash deposits to cover the operating cost of opening new accounts to discourage customers from abandoning their account opening plans after completing documentations. 

 The initial deposits are usually around N1,000 or N5,000 for savings accounts and N10,000 and above for corporate accounts.

The CBN said the new policy directive is in line with its commitment to encourage banks to improve their deposit mobilisation efforts while promoting the financial inclusion initiative.

“The CBN shall continue to encourage banks to improve their deposit mobilisation efforts. In line with the financial inclusion initiative, banks shall be required to allow zero balances for opening new bank accounts so as to make banking services accessible to the unbanked public. Accordingly, banks are encouraged to develop new products that would improve access to credit and simplify their account opening processes, without compromising the Know-Your-Customer (KYC) requirements,” the guidelines indicated.

It said that despite the drive for deposits, banks and other financial institutions should continue to apply the principle of KYC as specified in the CBN the Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) Regulations in Banks and Other Financial Institutions Regulations (BOFIA) Act, 2013. 

“Financial institutions should not conduct any business with persons/entities who fail to properly identify themselves,” it said. (Financial Watch Nigeria)