Nigerian Banks Rip N6Bn off Customers

Lamido Sanusi, governor, Central Bank of Nigeria (CBN), has returned a damnining indictment on Nigerian banks which he accused of ripping off customers to the tune of N6 billion last year alone.

“The Director of Consumer Protection has recovered over N6 billion in the last one year for customers that were cheated by banks,” Sanusi said.

The governor who spoke at annual Isaac Moghalu Foundation(IMOF) Lecture and Symposium in Abuja, said that Nigerian banks made questionable gains from transactions undertaken with customers.

Some of such charges customers usually complain about border on high Commission on Turnover (CoT), text message alert charges and charges for e-mail; all arbitrary and unfair charges banks usually deduct from their accounts.

The charges and their procedures are not consistent with the monetary policies of the Central Bank of Nigeria.

 Because of these inconsistencies, many account holders are overcharged/under-credited to the extent of closing their businesses and losing their properties to banks.

But the CBN  in January this year made it clear to banks, through the Bankers Committee, a committee of CEOs of all banks operating in the country, that it would closely monitor charges made by banks as from this year.

Part of the directive to banks was to stop charges on Automated Teller Machines, ATMs, transactions, which before now cost customers N100 on each transaction done on ATMs of other financial institutions other than the customers’ bank.

The January directive came on the heels of  “exposure draft for guide to bank charges,” addressed to deposit money banks (DMBs) and other stakeholders since June 2012.

The document explained: “The CBN is currently reviewing the extant guide to bank charges, which has been in use since January 2004. The review is intended to align the tariff regime in the banking industry with present economic realities and offer a platform for standard application of charges on different types of banking products and services.

“An important component of the review exercise was the development of a minimum disclosure to all customers prior to the consummation of every credit transaction.

“The goal of the review is to produce a guide that is collectively owned by all stakeholders in the banking industry with the concomitant feature that it will accommodate the freedom of operators to charge competitive prices, to protect consumers.

Part of the draft document recommended that for current account in credit balance, “interest rate of 0.5 per annum, payable monthly on daily balance of N500, 000 above.”

Similarly, for savings and deposits account, it recommended a minimum of three per cent per annum on daily balance, which shall not be subject to any condition

“Lending rates, should be Monetary Policy Rate (MPR) + maximum of eight per cent (customer must be notified at least 48 hours before the application of the new rate),” it added.

For processing/renewal fee, it also said that the fee shall be “negotiable subject to maximum of one per cent of the principal (one off charge).”