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Banks And Excessive Charges



The Consumer Protection Department of the Central Bank of Nigeria (CBN) recently disclosed that Nigerian commercial banks refunded N23billion to their customers in the eleven months leading up to November 2018.

This came on the heels of about 2.75 million complaints against illegal and unauthorised deductions through excess charges, fraudulent acts and electronic payment errors.

It also disclosed that within the period, the banks resolved 1.97 million or 71 percent of the total complaints, and refunded N23.13 billion, $2.32 million, Euro 11, 355, and £49,243 to the affected customers.

Many Nigerians have wondered why the nation’s banking sector has remained one of the most profitable industries in spite of the economic recession post 2015.

While many sectors have collapsed as a result of the cash crunch, it is a wonder that the banking sector has stayed afloat, declaring huge profits and paying out sizeable dividends to shareholders. Only very few of them faced liquidation.

Many banks are believed to walk a tight rope and are near to collapse, though this is not evident to the public, as was the recent takeover of Skye Bank by Polaris; however, this is just an allegation until their financial states are exposed. And many of the banks are believed to have resorted to levying all manner of charges on the accounts of customers to stay afloat.

Bank customers in Nigeria have continually lamented the arbitrary imposition of various charges. It is, however, to be noted that most of these bank charges are permitted by the CBN, which had effected new banking charges on May 1, 2017

These vary from charges on: current account maintenance, forex transfers, withdrawals from domiciliary accounts, bank drafts, electronic banking, electronic fund transfers, card maintenance, Naira debit/credit cards, issuance of debit cards, withdrawals and transaction notification (SMS), and monthly account updates, among others.

While some of the charges may be considered appropriate, some need to be scrutinised, such as the card maintenance charges as well as the withdrawal charges which occur on the third withdrawal using an Automatic Teller Machine (ATM).

Some times, too, some banks will send a customer a birthday message and other such compliment and still charge the customer for that.

It was, therefore, a relief to many bank customers who lauded the Senate order to the apex bank to suspend the ATM card maintenance charges.

The resolution came as part of a motion on illicit and excessive bank charges on customers’ accounts sponsored by Senator Olugbenga Ashafa, representing Lagos East.

The resolution also directed its Committees on Banking, Insurance and other Financial Institutions to conduct an investigation into the propriety of ATM card maintenance charges in comparison with international best practices and report back to the Senate.

Some interest and professional bodies have, however, kicked against the resolution, saying banks suffer untold hardship in the provision of business enabling infrastructure for their daily transactions.

They contend that the charges are not for profit making but to offset the cost of buying the machines and the cost of administering the service such as the cost of power, maintenance and others.

We agree with the above groups  that, as much as possible, the government should make critical infrastructure available in order to reduce the burden on the banks, which will in turn drive down the cost of their operations and, consequently, the price of their services.

However, while this paper seeks to understand their argument posed, it has become imperative to query if customers should bear the responsibility of paying for the maintenance and service of banking equipment and machinery, or paying for various infrastructure  which otherwise should be the responsibility of government.

While we commend the efforts of the sector in providing the Nigerian people with professional banking services, it is vital to point out that there are still many challenges faced by the masses in accessing quality banking service, as such they should not be further burdened with the responsibility of paying excess charges.

The newspaper maintains that in the interest of the Nigerian people, banks should reduce the alarming queues often evident at most ATM machines by ensuring that available teller machines are serviced and funded to help alleviate the suffering customers, who sometimes wait hours without end to access their funds.

This paper is of the opinion that as a matter of urgency, banks should withdraw the excess bank charges which sometimes deny customers with very limited resources access to their hard-earned savings.

The CBN should also continue to act as a bridge between the banks and the masses and to ensure that the people are not unnecessarily ripped off by banks who have been entrusted with their money.





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