Banks violation of CBN Policy on charges worry Customers

Banks violation of CBN rules on charges worry Customers

ANGERED by a recent revelation that top ten banks in Nigeria collectively made N138 billion in 2016 from extra charges, which is 26 per cent up from N109 billion in 2015, a herd of bank customers who spoke to Nigerian Tribune blame weak enforcement of rules by the Central Bank of Nigeria (CBN) for wrong charges included in the figure.

For example, it is clearly stated in the ‘Guide to Charges by Banks and Other Financial Institutions’ which took effect May 1, 2017 that “Where a charge is stipulated as negotiable, banks and Other Financial Institutions (OFIs) are required to draw the attention of customers to their rights to negotiate and the two parties are required to mutually agree on the applicable interest and/or charge via a verifiable means.”

But checks revealed that banks still fail to consult customers despite CBN’s terms to the effect that Current Account Maintenance Fee (CAMF): in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank, should be discussed and agreed upon with the customer.

This is supposed to be “Negotiable subject to a maximum of N1 per mille,” (N1 per every N1, 000) but banks do not care about negotiating anything with their customers. Instead, they charge, deduct and alert their customers.

Further investigation revealed that banks still charge N100, instead of N50 for Electronic Funds Transfer below N10, 000,000.

Meanwhile, some of the charges from which the ten lenders scooped N138 billion from include: ATM card issuance, replacement and renewal charges; Hardware token and soft token issuance charges; ATM withdrawal charges; Funds transfer charges; bulk payments such as salary; and SMS alerts.

A bank customer, Jude Okwuoseh said he is very much excited at the growing awareness on the activities of typical Nigerian banks. According to him, they hide behind their fingers and take advantage of weak CBN regulations to cheat on their customers.

“Recently Diamond bank started deducting stamp duty charges from my Diamond xtra-savings accounts. The annoying aspect is that stamp duty which is only on deposits, and on current accounts only are charged on an account that has neither any deposit nor was active for two months, was charged in arrears.

“They believe that every Nigerian is a financial illiterate. Please every bank customer should support the course of the Bank Customers Association of Nigeria. This is a noble course we all must fight. I commend the effort of the leadership of this association.”

Another customer, Abbey Oba believes that until Nigerians try out the court options, CBN may just be helpless. First Bank of Nigeria according to him has been drawing down on an account that has been dormant for more than three years, “charging fee for SMS alert and alerting me that am charged. I think since alerts are optional, I am going to stop it and use my mobile to check my account regularly.”

Similarly, Ikegwuonu Don Onyiah who said he is from the University of Ibadan Alumni said his current account balance was COMPLETELY exhausted by Diamond bank when it was dormant. “More grease to the bank’s elbows,” he exclaimed

Yet another bank customer, Dime Anne Agboire observed that Banks in Nigeria no longer make money from core business of banking and provision of services to Customers. They make lazy money from these charges he added, which are imposed on customers whether they like it or not.

“Diamond Bank recently charged N300,000 as bank charges on an account which had been dormant for four years. There was never any credit facility on the Account, just bank charges on a dormant account.

“Yet CBN looks on helplessly while Banks are defrauding Nigerians who have entrusted money to the care of Banks for safe-keeping. Is there really any difference between the armed robber and the Banks? CBN needs to urgently call Nigerian Banks to order, this is not in line with international best practices.”

To bring some clarity regarding the applicable banking terms, increase transparency and competition, and align the financial services charges with the current economic realities, the Central Bank of Nigeria (“CBN”) in furtherance of its powers under the CBN Act (as amended) and the Banks and Other Financial Institutions Act (as amended) (“BOFIA”), on 21 April 2017, published a Circular which serves to guide all Banks and Other Financial Institutions (“BOFI”) on the permissible parameters for imposing charges for the Services that these Institutions render to their customers.

Licensed BOFI to which the above Circular applies to include: Banks, Micro-finance Banks, Primary Mortgage Institutions, Finance Companies, and Mobile Phone Operators among others.

The effective take-off date of the 2017 CBN Guide on Financial Charges is 1st May 2017. The 2017 CBN Guide on the charges approved for financial services rendered is however not exhaustive as all new products and services not covered in the Guide, require the prior written approval of the CBN, before such new charges are introduced and implemented.