Loans: FG Issues New Directive To Commercial Banks

The latest directive from the Federal Government mandates commercial banks across the nation to deduct and remit 0.375% on all loans they disburse. This move, outlined in a communication sent to customers by banks, stipulates that the deduction will be applied to the principal loan amount. It signals a broader scope for stamp duty charges, extending from conventional bank transfers to encompass foreign transactions and now loans.

With this development, borrowers and financial institutions alike must adapt to the new regulatory landscape. The imposition of the deduction shows the government’s efforts to bolster revenue generation and broaden the tax base. As banks navigate the implementation process, borrowers may experience adjustments in their loan terms and repayment structures to accommodate the additional charge.

In a message sent to their customers on Wednesday notifying them of the deduction, one of the banks wrote, “Dear Valued Customer, we write to inform you that the Federal Government of Nigeria has directed that all banks remit stamp duty on all loans.

“In line with this directive, 0.375% on every principal loan amount disbursed will be debited and remitted to the Federal Government of Nigeria.”

“However, all existing approved loans remain unchanged and are to be fully repaid in line with the terms and conditions. We are committed to offering you exceptional service every step of the way.”