Hidden and arbitrary charges are now the norm with Nigerian banks, which is giving them a not-so-pleasant reputation. These endless charges have almost become a necessary evil as customers now live with them; having been left without options.
Bank customers in Abuja and other states who spoke with Daily Trust expressed frustration over the numerous non-transactional debits they receive from their various banks without explanations.
While “big-time customers” that transact businesses running into millions of naira rarely complain of deductions by the banks, petty traders whose profit margin is small told our correspondents that they were being exploited.
Some students also said they rather kept their upkeep money in their wallets than in their bank accounts.
“All the new generation and old generation banks are fond of perpetrating illegal deductions,” said Zainab Musa Baba, a housewife and petty trader in Nyanya, Abuja.
“You will always see at least two alerts after every transaction, even if it is for just N1,000, and at the end of the month, you see multiple deductions,” she added.
Nwachukwu Samuel who banks with Access Bank, said he usually saw debit alerts on his account, and that most times, he would not go to the bank to complain.
“Sometimes I would not even do a transaction and I would see N50 charge. I see all manner of debit alerts, and because the money is usually small, and considering the stress one has to go through by visiting a branch to complain, I just let go,” he said.
Samuel further said he was aware that the bank would be making a lot of money from the charges, looking at the volume.
A customer with Guaranty Trust Bank (GTB) who simply identified herself as Agnes, called on the Central Bank of Nigeria (CBN) to intensify surveillance on the banks, saying they were feeding fat on vulnerable customers.
She said although the charges were small, they were illegal and therefore advised CBN to punish erring banks.
Mukhtar Aliyu who spoke with one of our reporters from Kano on phone, said the needless and arbitrary deductions had discouraged customers from embracing the cashless banking policy.
“Whenever I sell a carton of spaghetti, my profit margin is not more than N100, but the banks have a way of getting something from this transaction, somehow,” he said.
“There was a day a customer told me that if he paid me for the bag of rice he bought through bank transfer, his bank would also charge him for that simple transaction,” he added.
Another bank customer, Chukwurah U. Paul said, “It is very pathetic, to say the least. The banks are always devising avenues to put holes in people’s pockets.
“We are charged for depositing cash, withdrawing and text messages. We will soon be charged for breathing the air and receiving sunshine,” he said.
Govt aware of infractions
The CBN recently disclosed that it had so far recovered N89.2bn excess and illegal charges slammed on customers by banks.
The Governor of CBN, Godwin Emefiele, represented by the acting Director, Corporate Communication, Osita Nwanisobi, at a public enlightenment fair in Calabar, Cross River State, said the figure was recovered in June, 2021, based on 23,526 complaints they received from customers bordering on charges and other related matters.
In April this year, the Speaker of the House of Representatives, Femi Gbajabiamila, expressed concern over the way banks charge customers indiscriminately during transactions, saying that apart from known charges, there appeared to be “hidden” charges the banks impose on their customers.
Speaking when he hosted the board and management of the Standard Chartered Bank led by its Chief Executive Officer (CEO), Mr Lamin Manjang, Gbajabiamila said the house was concerned that such practice was making customers helpless; hence that Nigerian banks should come up with ways to address high charges on loans and other facilities they offered.
Some customers who spoke with one of our reporters said there was the need for the CBN to scrutinise all bank charges from time to time.
Some of them called for a forensic audit of the charges rather than waiting for customers’ complaints.
Approved bank charges
According to records from the CBN, the approved bank charges for various transactions include stamp duty, SMS alert (N4/SMS), using another bank’s ATM (N35/transaction), account maintenance fee/commission on turnover, which is N1/mille (an acronym commonly used in the banking sector. It means per thousand. Thus, in the COT explained above, banks are allowed to charge N1 per N1,000 debit transaction on current accounts).
Others are ATM card maintenance charge (N52.50 monthly), in-branch statement printing (N21.50/page), cash withdrawals/deposits; while users of Unstructured Supplementary Service Data (USSD) services pay N6.98 per transaction.
While these deductions have been approved by the CBN, several others are not categorised. Daily Trust found out that banks now charge 7.5 per cent as Value Added Tax (VAT) per money transfer made on the NIBBS instant transfer platform. There is also a commission by banks for such transfers, among others.
There are also cases of the approved charges being slammed on account holders multiple times on a single transaction, or even when there is no transaction at all. For instance, a transaction could attract several text messages, with each attracting a charge for the customer. The same scenario could apply for commission on turnover charges, account maintenance fees and stamp duty charges.
It is worthy to note that some of these charges are avoidable. For instance, using an ATM that is not your bank’s and opting not to receive text message alert but only email notification on transactions.
When Daily Trust contacted the CBN to speak on these constant complaints, its spokesman, Mr Nwanisobi, said, “What we do is that whenever we get these complaints, they are thoroughly investigated. If they are found to be true, the CBN makes sure that these customers are properly refunded. And we have so far recovered N89bn.”
The recently recovered figure indicates that the apex bank has the will to punish commercial banks for bad behaviour.
However, as Nwanisobi stated, except when customers make formal complaints, the CBN sees no evil.
It’s extortion – Experts
Munir Aliyu, a financial expert who worked with both old and new generation banks, attributed multiple deductions by banks to “laziness to think out of the box to get big money.”
According to him, “Most of the banks are looking for small money from vulnerable customers because they don’t want to give loans to serious investors.
“Instead, they tax their customers dry because if you know the money they make in a month from these needless deductions, you will not take it lightly.
“Many banks don’t want to give loans to farmers or manufacturers; instead they prefer to tax petty customers.”
The arbitrary charges are on top of issues of growing customer dissatisfaction with commercial banks in Nigeria. For instance, a previous poll established that as far back as 2013, “customers have become more intelligent on the range of bank services.”
The poll sought the opinions of banking customers on their relations and service delivery of Nigerian banks. It established that the Federal Competition and Consumer Protection Commission (FCCPC) had received a large number of complaints from bank customers over alleged hidden and unexplained charges.
In March, 2010, FCCPC organised a consumer interactive forum, where the CBN directed commercial banks to fully disclose all rates and charges associated with their products and services to stem all forms of sharp practices. Up till now, the charges keep coming and no bank has been punished.
The survey established that, overall, the majority (61 per cent) agreed that customers were being exploited by banks through “hidden” charges. This was followed by 19 per cent of the respondents, who disagreed, and 16 per cent that neither agreed nor disagreed. 11 per cent strongly agreed that bank customers were being exploited, while a meagre four per cent strongly disagreed.