In the face of outcry over rising transaction costs of financial services, deposit money banks (DMBs) have extended electronic money transfer levy (EMTL) to domiciliary accounts. The new levy takes immediate effect.

The levy, which is completed by banks on behalf of the government, was previously restricted to naira accounts.

But banks have communicated to their customers that the fee would, with immediate effect, apply to domiciliary accounts on the directive of the Minister of Finance, Budget, and National Planning, Zainab Ahmed.

Accordingly, a dollar or pound account holder would henceforth pay an equivalent of N50 as EMTL at an exchange rate to be determined by the Central Bank of Nigeria (CBN).

“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.

Usman signed the EMTL Regulations into law in 2022 placing a ₦50 fee on all deposits above ₦10,000. The charge on electronic transfer is an extension of the Stamp Duty Act, which came into force via the Finance Act 2019.

The extension of the charges to foreign currency accounts comes on the heels of an increase in social protest over the rising cost of banking services, particularly electronic transactions that the CBN is aggressively enforcing.

The Guardian had reported a spike in the adoption rate of fintech and shadow banking, which offer cheaper services. Some of the fintech operators have seen a surge in the number of subscribers in recent weeks following the rise in the number of individuals transacting electronically.

Cheap transaction costs, convenience and speed are given as major reasons Nigerian depositors are dumping conventional banks for fintech, despite the concern about the safety of depositors’ funds on digital wallets in the custody of the digital-first banks.

Interestingly, the pressure is beginning to take a toll on the efficiency of fintech firms, which are becoming the vampires in the ecosystem. Hence, downtime incidents are becoming daily experiences across the leading operators – a situation that will make choosing between the two variants a more complicated one for depositors.

The Guardian