CBN okays banks to open new accounts without initial deposits

A new directive of the Central Bank of Nigeria, CBN, has made it acceptable for deposit money banks in the country to allow customers to open new bank accounts without initial deposits.

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

This is against the usual practice by commercial banks as they insist on initial deposits to cover operating cost of opening new accounts. The initial deposits range between N1,000 and N5,000 for savings accounts while for current account, its N10,000 and above.

According to the CBN, 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.

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“The CBN shall continue to encourage banks to improve their deposit mobilization 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.

The CBN also directed banks to 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 irrespective of their drive for deposits.

“Financial institutions should not conduct any business with persons/entities who fail to properly identify themselves,” the CBN said in the guidelines.

By Timothy Enietan-Matthews

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