Festus Akanbi writes that the on-going sensitisation efforts of the Central Bank of Nigeria on how aggrieved customers of banks can seek redress over excess charges and commissions, as well as the outright refund of such disputed charges by banks will drastically reduce the negative trend and deter non-conformists from the laid-down rules in the Nigerian banking sector
It is a fact that the Nigerian banking sector, like other sectors of the economy, is going through a very difficult time.
This is because, apart from the inflationary effects of Nigeria’s current economic challenges which naturally discourage savings, the spike in the cost of operations amid the current energy crisis is putting undue pressure on banks to significantly cut their costs and grow their revenue.
Analysts pointed out that notwithstanding the current unfavourable scenario in the banking sector, bills have to be paid by these operators. Also, banks, that are currently losing some of their technical staff to foreign competitors are struggling to make their employment conditions attractive, at a cost, while shareholders of the respective banks are putting the boards and managements on their toes for a robust dividend payout at a period when lines of other revenue sources are thinning out.
Bank Customers Taking Heat
As banks devise means of responding to the current challenges, banking industry watchers said it is the customers that are paying the price. Today, deposit money institutions are declaring huge annual profits while their clients are groaning under excessive and arbitrary charges.
Although complaints by bank customers cut across various issues, the CBN in its various Annual Economic Reports confirmed that most of the complaints bordered on ‘excess’ bank charges including other deductions that no one is petitioning against because of the size of the amount, logistics and cost that will be involved in following them through.
Protests in Banking Halls
Social media is lately replete with videos of angry customers, most of whom decided to create scenes in banking halls. From Lagos to Uyo, in Akwa Ibom State, to Kaduna, to Warri in Delta State, customers are daily expressing their frustrations over the failure of some affected banks to resolve issues regarding thefts from their accounts and illegal charges. Recently, a female bank customer went live on social media inside a commercial bank branch in Lagos, venting her anger over missing large sums of money from her account. Another affected customer also on his Twitter handle said, “There is a high level of coordinated fraud in the banking sector right now. So many customers are getting debited from their accounts and banks are claiming it is PoS transactions even from accounts where cards are barely used.”
So disturbing is the menace that recently, a man was seen in a viral going almost naked in a banking hall to protest a series of withdrawals from his account.
Recovery by CBN
The CBN said that as of June 2021, it had so far recovered N89.2 billion in excess and illegal charges slammed on customers by banks in Nigeria.
The CBN Governor, Godwin Emefiele, represented by the Director, Corporate Communications Department, Osita Nwanisobi, at a two-day public enlightenment fair earlier in the year, said the amount was based on 23,526 complaints they received from customers bordering on charges and other related matters.
On customers’ complaints, he 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 N89 billion.”
Speaking at another forum, Nwanisobi, who advised aggrieved bank customers to forward their complaints to the CBN, explained that the apex bank has since issued a circular on its website, showing all legitimate bank charges. He added that any charge outside what is stated in the circular is not allowed.
Responding to a barrage of enquiries by aggrieved customers, in a recent online media forum, the apex bank’s director reiterated the resolve of the apex bank to remedy the situation.
“What you should be asking them (bank customers) is if they have reported those incidents to the CBN. We work based on the information we receive,” Nwanisobi said
“We have channels; we have educated them; we have said that you have the right to complain if you get debited.
“You need to report to CBN and we will take it up. Anytime we have done sensitisation, we showed them, in concrete terms, the amount we have recovered from banks and sent back to individuals. He also advised customers to allow deposit money banks to resolve their complaints within two weeks.
“If after lodging your complaint, your bank still fails to engage you and resolve the complaint within two weeks as provided for in the ATM Help Desk Circular, you have the right to escalate your complaint to the Consumer Protection Department (CPD) of the CBN,” the apex bank said. The apex financial regulator said customers can contact the CPD by sending an email to cpd@cbn.gov.ng, contactcbn@cbn.gov.ng, or call +234 7002255226.
Banks Make Big Haul
As bank customers continue to count their losses to excessive charges for bank services, reports showed that nine major Deposit Money Banks in Nigeria raked in N554.23billion from fees and commissions in 2021. This amount is 29.4 per cent higher than the N428.32billion they made in 2020.
The banks are Access Bank Plc, Zenith Bank Plc, Guaranty Trust Bank Limited, United Bank for Africa Plc, First City Monument Bank, Stanbic IBTC, Wema Bank, Sterling Bank, and Fidelity Bank Plc.
According to reports, the sum of N554.23billion was arrived at after aggregating the net fee and commission income contained in banks’ annual financial statements that ended December 31, 2021.
The report showed that fees and commissions account for a significant percentage of non-interest income for banks and represent income from account maintenance fees, electronic banking fees, and other credit-related commissions.
Net fee and commission income is the actual revenue generated from these charges after expenses incurred from providing the services have been deducted.
Access Bank raked in a total of N118.56billion as against N93.57billion generated during the same period in 2020. The bank’s financial report also showed that it made N7.23billion from electronic bank charges and the sum of N33.35billion from e-banking fees.
During the review period, Zenith Bank made N103.95billion from fees and commissions, resulting in a total income of N132.88billion and expenses of N28.96bn. The amount generated by the bank in 2021 is 31.03 per cent higher than the N79.33billion recorded in the previous year.
For FCMB, revenue from fees and commissions rose to N28.75billion in 2021 from N19.55billion recorded in 2020, the bank’s financial statement stated. The report also revealed that the bank earned N12.82billion from electronic banking fees and N4.8billion from account maintenance charges.
Meanwhile, Wema Bank generated the sum of N13.42billion from fees and commissions in 2021, while Sterling Bank generated N13.08billion during the same period.
Some Approved Bank Charges
The list of the approved bank charges includes
Electronic Funds Transfer which is put at N50 for transactions done above N50,000; N25 for
N5,000-N50,000 and N10 charge for below N5, 000.
The charge on ATM withdrawals from other banks’ ATMs was reduced to N35 from N65 for the third withdrawal within the same month.
Naira debit or credit cards linked to savings accounts attract a maximum of N50 quarterly maintenance fee while foreign currency denominated debit/credit cards attract $10 from $20.
The apex bank said that the charge for hardware tokens is subject to cost recovery subject to a maximum charge of N2,500. It was reduced from N3,500.
The issuance fee for naira debit card (s) is N1,000 (one-off charge) irrespective of the card type either regular or premium card. The same charge applies for a replacement or renewal.
Also, sending to an account holder attracts a minimum of N50 subject to one per cent of transaction value or N300, whichever is lower. While for a non-account holder, it attracts a minimum of N50 subject to 1.5 per cent of transaction value or N500, whichever is lower.
For individual cash deposits, the rate is two per cent for transactions above N500,000 while cash withdrawal is three per cent for transactions above N500,000.
The rate for corporate cash deposit is three per cent for transactions above N3million while withdrawal is five per cent for transactions of N3million.
For other categories which include Status Enquiry at the Request of Customer (e.g. Confirmation Letter, Embassy Letter, Reference Letter, Letter of Indebtedness/Non-Indebtedness etc.) each of these attract a rate of N500 per request.
The fee for Short Message Service (SMS) mandatory alert is based on cost recovery from the previous maximum charge of N4.
Bill payment via e-channels will attract a maximum charge of N500 from 0.75 per cent of the transaction value subject to a maximum of N1,200.
Special Request for Statement of a Bill of account is N200.
Analysts said given the readiness of the apex bank to assist aggrieved customers from getting a refund of their money illegally deducted by banks, the onus lies on individuals to take advantage of the window of opportunity.
