How CBN, three others milk Nigerians through Remita, extra bank charges

AFTER waiting for nearly 30 minutes on the queue at the banking hall Nnajiofor Cynthia, a student of the University of Nigeria, Nsukka anxious to make her deposit that morning, was notified that a sum of N300 bank charges would be required to finalise her school fees deposit of N45,600 into the Treasury Single Account, TSA.

In December, 2011 the Central Bank of Nigeria, CBN, signed a contract to hire Systemspecs- a local financial/tech company that designed Remita, an online platform. The firm is  expected to facilitate e–payments on government financial services to a single account overseen by the apex bank in line with chapter five, Section 80 (1) of the Nigerian Constitution.

The decision to hire the company owned by John Obaro was borne out of fact that the Nigeria Inter-Bank Settlement System Plc (NIBSS) – a subsidiary of the CBN, at the time lacked the capacity to carry out the functions for which Systemspecs was being hired for.

By August 2015- September 2016, Remita reported remittance of over three trillion Nairas into the TSA (N3, 651,360,698,359.03) for the Federal Government.

However, public outcry and criticism in October 2015 of fraudulent extortion and exorbitant charges by the payment interface led to a pause on payment charges into government accounts.

Abayomi Oniku, Divisional Head, Public Sector Systemspecs who spoke to The ICIR  said the gains made from the use of the interface as charges billed payers was shared amongst shareholders–Systemspecs Remita, CBN, Deposit Money Banks at 50 per cent, 10 per cent, and 40 per cent respectively.

Therefore, it wasn’t kept by the fintech company alone – An assertion to which John Obaro, Chief Executive Officer, and CEO, Systemspecs, had earlier attested.

As the controversy thickened, the CBN on November 1 2018, released a directive for the enforcement of a flat rate charged payers for every deposit—both cash and electronic transaction made into the TSA’s.

“All payers using other channels apart from Cards (Bank Transfers, Mobile Payments, Bank teller points, USSD and all other channels) shall pay the sum of N150.00 (One Hundred and Fifty Naira only), per transaction,” a section of the letter read.

It also stipulated that “All payers using cards are to be charged N150.00 (One Hundred and Fifty Naira only) plus 0.75 per cent of the amount being paid, subject to a maximum of N1,200.00 (One Thousand Two Hundred Naira Only).”

This meant that depositors would have to pay additional charges on every transaction for using the interface–birthing a ‘non-seamless’ deposit transactions into the TSA as the federal government reneged on its initial responsibility to bear the cost of service on behalf of the revenue payers.

However, the introduction of the directive by the CBN may have come a little too late.

Different folks, different strokes

Between 2016 to 2017, prior to the directive, The ICIR was able to establish that some DMB’s placed arbitrary charges on payments made through the Remita gateway into the TSA, as sources revealed that they paid between N300-N1000 –not captured on the final Remita receipt.

“When I gave my money to the cashier, I was asked to pay N300 charges which is to be paid using the bank deposit teller. So it was not evident in the final receipt issued at the end of the transaction that there was an extra charge for the service,” The ICIR was told.

Coming to terms that she would have to pay N5000 to acquire her original JAMB admission letter, rather than getting the document on her profile through the portal, Peace Agada had to pay additional bank charges of N175.50 bank charges– an amount she said would have preferred to use in purchasing a much-needed bottle of cold coke beverage to calm her parched throat in the sweltering Makurdi-Benue State- sun after her business at the bank.

“I asked at the bank why we are paying the extra fees apart from the original payment, and they said it is bank charges. I have been paying for bank charges and I don’t even know what it is for. I come to give someone else money, only to be charged for doing so,” she fumed

The undergraduate who visited the bank with her friends to make the same payment told The ICIR that although they all came for the same purpose—deposit- varying charges were demanded each transaction.

“In fact, some even paid N200 as the bank charges instead of the N175 that we were charged. On that particular day, we were more than 30 students,” she said.

The ICIR also got the same report from another student who was present at the banking hall that afternoon.

Similarly, Ebere Anioke an overstay student of UNN, who also spoke to the reporter said the sum of N300 extra charges was demanded of her in other to facilitate payment of N500 billed for course registration.

Worthy to note, the Remita Public sector officer, Oniku, told The ICIR a ratio for Value Added Tax (VAT) is also included in the charges.

“IT is clear in the CBN circular that you mentioned it is clear that the channels of payments are recognised. So if you are making payment through a bank branch for instance, then VAT payments are included,” He told The ICIR.

However, a cursory look at some final Remita payment receipt does not indicate any deduction of VAT charges.

Remita Payment Receipt: No VAT deduction indicated

Attempts by the reporter to ascertain the ratio remitted to the FIRS—if any– from the service proved abortive at the time of this report.

Unfortunately, due to the inconsistency of the sum charged payers, an estimation of the exact amount that could have been raked in for charges into the TSA could not be ascertained.

However, records obtained from the Joint Admission Matriculation Board (JAMB) showed that from 2017 to 2018, the total number of 1, 116,482 (one million one hundred and sixteen thousand, four hundred and eight two) candidates gained admission into Federal Higher institutions of learning in the country.

Going by the fixed CBN flat rate at N150 flat rate on every transaction to the TSA, the undergraduate students would have paid N167,472,300 (one hundred and sixty-seven million, four hundred and seventy-two thousand, three hundred) on charges alone for their school fees payment into the TSA.

While at N157, the sum of N175, 287,674 (one hundred and seventy-five million, two hundred and eighty-seven thousand, six hundred and seventy-four) would have been incurred on charges alone.

According to Onyeka Olisa, a banker that spoke to The ICIR, “The payer has no option but to pay through this platform. The depositor, in this case, pays for the services being offered not the government.

“It should not be, but unfortunately, this particular issue falls under the circle of concern and not circle of influence.

“The circle of influence we can change, but matters within the circle of concern we cannot change. It falls within the jurisdiction of the lawmakers who made this law. It is only the National Assembly that can change it.

Also bemoaning the incessant charges incurred by the use of the Remita interface, Mahmud Abdul, a lawyer in Abuja said it is shameful and wrong for Nigeria as a country approaching high modernity to seek the assistance of a third party in the management of her resources.

“Expensive charges itself shut out people from open government. The country should be able to develop its own framework to make payment of fund into the government coffers easier without unnecessarily burdening her citizen.

“Hence it is not proper for these extra charges to be passed over to ordinary poor Nigerian citizen who is trying to access the government framework. Access to the government should be free!”

The ICIR was able to ascertain that in Ghana where the Treasury Single Account (TSA) was launched in 2016, Systemspecs-Remita interface has also been introduced and banks charge the Ghanaian government for maintaining the accounts while payers are not charged extra fees for transactions into the TSA accounts.

    The CBN had claimed that at the inception of Remita, the government was charged with paying the fintech company for running the TSA gateway, however, through 2016 to the later part of 2018 the government claimed it could not shoulder the financial obligations of paying the systemspecs.

    Investigations revealed that this development resulted in the arbitrary charges imposed on payers by the banks. Consequentially, the government had intently dumped the cost of operating the TSA gateway on Nigerians while the CBN still partook in the sharing pattern of 10 per cent ratio incurred from billing Nigerians, Remita 50 per cent and Deposit Money Banks 40 per cent.

    Implementation of a flat rate was also obviously not in favour of the poor masses who were being charged varying amounts ranging from N157 to N500.

    Although the CBN-recent propagators of cashless policy- has directed for a seamless transaction-no extra charge- for payers using e-transaction payment channels, this is yet to be implemented on payments into the TSA. The reason is that some payers remitting revenue to the government still have to pay for services rendered by e-payment gateways through the DMB’s when making cash transactions.

    The situation in Nigeria is absolutely different from what is obtained in Ghana as depositors are still billed the sum of N150 and above on a daily basis, and this is shared among the four stakeholders—CBN, REMITA, FIRS and DMB’s.

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