After years of groaning by bank customers over arbitrary transaction charges, the Central Bank of Nigeria is stepping in. NGOZI AMUCHE takes a look at the unending menace in the financial sector.
To some unwary bank customers, it does not matter, because it is probably insignificant. A hundred naira, a few thousands of naira to an account that runs into several millions of naira are often overlooked by customers. But to the banks that make the charges, it is good business, not minding the pains to the hapless depositors.
Imagine a bank with five million customers, deducting N100 from each depositor in a month, what you get is N500m.
Perhaps, this explains why most banks in the country declare huge profit after tax while the economy is still tottering. The issue of arbitrary and sometimes excessive bank charges has always been a source of worry for millions of Nigerians. Currently, some customers have filed lawsuits against their banks over incessant bank charges. If banks continue with arbitrary charges, the confidence of customers may be eroded. Many bank customers have decried ‘deductions’ from their accounts in recent times. The development might have prompted the Consumer Advocacy Foundation of Nigeria to denounce the charges.
The Customer Protection Department of the CBN has been inundated with complaints of excessive charges from customers. Despite the complaints, the charges persist.
No fewer than nine multiple charges and sundry taxes are imposed on customers as commissions on transactions. These are stamp duty, value-added tax, card maintenance fee, current account maintenance fee, and annual card maintenance fee. Other charges are electronic transfer charges, automated teller machine charges, charge for hardware token, and fee for short messages, amongst others.
Financial Street‘s findings revealed that bank charges have thrown some of the customers out of business while some are struggling to survive.
According to statistics by the Customers Protection Department of CBN, about N60bn excessive charges were recovered on behalf of customers from the defaulting banks.
Head, Consumer Protection Department of CBN, Hajia Khadijah Kassim, described the illegal deduction of money from customers’ accounts by banks as fraud, which should not be tolerated, adding that the shocking finding followed CBN’s receipt of over 5,500 complaints from bank customers.
Kassim, who spoke recently at a forum in Calabar, Cross River State, explained that this is not the first time such discovery would be made, but it seems the banks are not willing to stop fleecing customers via various charges.
Professor of Economics, Maxwell Udechukwu, warned that complaints by bank customers may rise in the months ahead if stiffer penalties are not enforced, especially now that account holders across the country have increased by 35m between January and May 30, 2020, according to a recent data by the Nigeria Interbank Settlement System.
The data showed that the total number of bank accounts grew from 125m in January to 160m at the end of May. This represents 78.1 per cent. Savings accounts grew by 33.8m within a five-month period.
The persistence of this anomaly drew the attention of CBN Governor, Godwin Emefiele, who expressed worry and disappointment that banks have continued to shortchange their customers through non-dispense or partial dispensed errors from ATMs.
The apex bank has, however, directed all banks to resolve issues of non-dispensed or partially dispensed funds from customers ATM last year.
Further investigations by Financial Street also showed that except bank customers, especially those with large volumes of transactions engage their banks in thorough account reconciliation, and sometimes accompanied by legal procedures, illegal charges will continue.