Emeka Okoroanyanwu and Babajide Okeowo
As the year 2019 opens on a cautious note, customers of Deposit Money Bank (DMBs) in the country are groaning under the avalanche of charges estimated at about N1.5 trillion annually being deducted from their accounts by the various institutions.
Such deductions come under various names: ATM maintenance charge, SMS alert charge, stamp duty, ATM renewal charge, cheque book charge, statement of account charge, et cetera. The list is endless.
The Nigerian Xpress Business can reveal that 10 banks’ customers have paid about N145 billion as account maintenance fee since it came into operation in 2016, while 11 banks’ customers paid about N162 billion as ATM maintenance charge in 2017. Another N125 billion has been taken from customers accounts as stamp duty charge. All the charges are approved by the Central Bank of Nigeria (CBN).
The 11 banks which consist of Zenith, First Bank, GTBank, Access Bank, Sterling, IBTC, UBA, Diamond, Fidelity, FCMB and Union constitute about 80 per cent of total bank customer base in the country.
Customers of these banks are complaining of the many charges, which they said is creating deep holes in their pockets and they are not keeping quiet about it.
For instance, between January and June last year, CBN received 1,473 complaints from customers over excess charges, unauthorized deductions and other sundry issues. Within that period, a total of N4.63 billion, $80,414 and 19,263 Euros were refunded by banks to customers.
However, with the recent directives by the Central Bank of Nigeria (CBN) that all banks in the country should deploy the Consumer Complaints Management System, CCMS to engender public confidence, many are hoping that things may get better.
Titilayo Adebanjo has been operating an account with one of the DMB’s in the country for more than five years and she is fed up with the incessant and illegal deductions from her bank account.
“Every time an SMS alert comes into my phone from my bank, my heart skips a beat because I do not know what charges they have removed again. I do not understand why banks should debit me for sending me an SMS that a transaction has occurred on my bank account,” she said.
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For Omoyemi Ajileye, the various charges the banks subject their customers to are outrageous and they need to be cautioned.
In her words, “The banks need to be cautioned over these incessant and outrageous deductions from my account. You can begin to imagine when you have N3,000 in your account and you have planned on withdrawing that exact amount to meet certain needs and out of the blues, you get an SMS from your bank that you have been deducted the sum of N152 for one charge or the other, it has defeated the purpose of what I want to use the money for.
“More worrisome, after three transactions on a particular Automated Teller Machine, ATM which does not belong to my bank, I am charged N65 per transaction on another ATM, this is so uncalled for,” she lamented
Hakeem Ashiru joined in the conversation by complaining of the excessive deductions made on his bank accounts and wants government and other regulating agencies to come to the aid of the hapless customers.
“I think they need to stop this act, because it is outrageous to just deduct money from a customer’s account. Carrying out or not carrying out any banking transaction is equivalent to deliberately throwing money away. If you transfer money from your account to another account, you are charged, even if you leave the money in your account and not carry out any transaction, you will find out that the money is periodically debited till nothing is left in the account. Another worrisome trend is the habit of having to pay for using another bank’s ATM. For instance, when you have 2,000 naira in your account, the moment you use the ATM (particularly if it’s not your bank) N65 naira is deducted from the money, you cannot even collect the exact amount you need you will be left with less the amount you originally want to withdraw. I am tired of this system. It just like they are milking us.”
A customer of one of the top three banks in the country lamented that he opened an account with N20,000.00 and that within six months, only N1,200.00 was left in the account without making any deductions from the account.
Chairman of Bank Customers’ Association of Nigeria, Dr Uju Ogubunka deplored the ubiquitous bank charges in Nigerian and blamed the inability of customers to fight for their rights for the illegality. He told The Nigerian Xpress Business that Nigerian bank customers should take up the challenge and come together for the common good, adding that they should take up the fight and stop at mere complaints. Said he; “We need a critical participation of bank customers on this. If we have 2,000 to 3,000 customers challenging the deductions, the banks would do something about it. But when it is only two or few people complaining, they will not act.”
A bank expert, Chris Enyinnaya flayed the banks for failing to render statutory services they ought to render while charging for the services.
“The truth of the matter is that banks fail to render services, which they are by law bound to render and when customers request for such services, they levy charges. For instance, by law, banks ought to render an account of money customers place at their care on a regular basis as agreed; maybe weekly, monthly or quarterly.
When a customer approaches a bank and demands for a statement of account, which the bank has not rendered for say one year or two years for those applying for a visa, the bank charges them by as high as 50 kobo per page. But failure to render regular account statement is a breach of the banker-customer relationship. How about that? Who pays for the breach?” he queried.
Similarly, Josef Omorotionwan wants banks to limit the charges they deduct from customer’s accounts to CoT and desist from pushing other charges to the customer.
“The Commission on Turnover, COT, which banks charge, and which is a debit on the customer’s account at the end of the month, is a major revenue source to the banks. COT is revenue to the bank while, like every other tax, VAT on COT is revenue to the government. The principal worry is why banks collect the COT from their customers and still pass the tax burden on the COT to the customer. In other words, the customers are subjected to double charges. The bank earns the revenue while the customer pays the tax. In the course of the month, the customer pays for virtually every service rendered to him by the bank – he pays for inter and intra-bank transfers, stamp duty, statement of account, alert charges, etc. This is stealing by trick and a height of economic injustice.
CBN to the rescue?
Perhaps, in a bid to arrest the menace of the excessive charge, the Senate mid last year summoned the Governor of the Central Bank, Godwin Emefiele to appear before it for an explanation.
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Emefiele was asked to explain why the official charges as approved by the CBN are skewed in favour of the banking institutions as against the ordinary customers of the banks, while urging CBN to suspend the ATM Card Maintenance Charges being deducted from customers’ accounts pending the outcome of the investigation.
This development followed a motion by Senator Olugbenga Ashafa representing Lagos East Senatorial District. In his lead debate, Ashafa pointed out that there had been several complaints from Nigerians about the excessive charges by Nigerian commercial banks.
The upper chamber also said it appeared the CBN was becoming insensitive to the plight of Nigerians who were already complaining of excessive charges by commercial banks.
And asked Ashafa, “If the CBN is trying to encourage a cashless Nigeria, why should they be making it more difficult and expensive for Nigerians to do transactions?”
CBN to the rescue; banks lose N11.4bn monthly, refunds N6.8b
The Central Bank of Nigeria (CBN), is also trying to arrest this menace. The apex bank in its half-year, economic review report disclosed that commercial banks had been ordered to refund N6.8 billion excess charges to their customers in the first half of 2018 from 1,439 complaints. According to the report, the bank received 1,439 complaints from consumers of financial services in H1’18.
The complaints were, mainly, in respect of excess charges, frauds, dishonoured guarantees and unauthorised deductions/transfers, among others.
According to The Nigerian Xpress intelligence unit relying on data from the Nigeria Interbank Settlement System PLC, there are over 75 million active bank accounts in the country and with the embargo on deducting Automated Teller Machine maintenance fees, commercial banks in the country are losing over N11 billion monthly.
Just last week, CBN also mandated all Deposit Money Banks to embark on the development of the Consumer Complaints Management System, CCMS to ease complaints management to engender public confidence in the financial system.
“With effect from 2nd January, 2019, Banks and other Financial Institutions (BOFI) are required to assign tracking number for every complaints received from their customers. They are also required to issue an acknowledgement, which will contain the assigned tracking number to the customer and must also commence upload of complaints to the CCMS on a daily basis” the circular reads.
The regulatory agency also threatened to sanction erring banks and other financial institutions that fail to comply with the directive.
The apex bank added that non-compliance with the directive would attract sanctions in line with the Bank and other Financial Institutions Act (BOFIA).
As the year 2019 begins with the normal business transactions, customers are hoping that the directive from the apex bank may arrest the scourge and eventually restore confidence to the banking sector.
