Mr. Okechukwu Unegbu, former President of the Chartered Institute of Bankers of Nigeria (CIBN) and ex-Managing Director of the defunct Citizens International Bank has urged Nigerian bank customers to take legal action if they notice irregular deductions from their accounts.
In an interview with the News Agency of Nigeria (NAN), Unegbu encouraged customers to challenge banks in court, despite the slow pace of the justice system. This comes in response to widespread complaints about unexplained, multiple deductions from customers’ accounts.
He pointed out that while small deductions like N5 or N10 per transaction might seem insignificant, they add up to substantial amounts for banks with millions of customers. He further urged customers to familiarize themselves with the Central Bank of Nigeria’s (CBN) guidelines on bank charges and file complaints if they are charged beyond the approved rates.
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In his words,
“That document explicitly states the legal charges that banks are entitled to from their customers. But most Nigerian banks charge much more than what is recommended which is against all principles of banking. Such things do not happen abroad. And the problem is that most customers do not complain. If customers get such charges, they should start by writing to the banks to complain. Going to the bank physically might not yield any positive results. If customers can develop the habit of complaining, the banks will start learning”.
It is worth noting that many Nigerian bank customers are not fully aware of the CBN’s guidelines on bank charges. As a result, they may not actively monitor their accounts or challenge the banks when they are overcharged. This allows banks to continue with practices that may not align with the regulatory standards. Some banks impose fees without adequately informing customers, Charges like SMS alerts, card maintenance fees, and transfer fees often appear as small deductions but add up over time, leading to customer dissatisfaction.
Recall that in December 2019, the Central Bank of Nigeria (CBN) reviewed downwards most charges and fees for banking services in its updated Guide to Charges by Banks, Other Financial, and Non-bank Financial Institutions which took effect from January 1, 2020. According to the CBN guidelines, transactions below N5,000 will incur a maximum fee of N10; transfers between N5,000 and N50,000 will attract a charge of N25, and transfers beyond N50,000 will receive a charge of N50.
Several experts have noted that the excessive charges will slow down the rate of financial inclusion as customers will avoid operating a bank account. Notably, it has been established by several surveys that customers are very sensitive to charges.
Excessive charges can deter these customers, especially low-income individuals, who are already financially vulnerable, from engaging with the formal banking system. This can make them avoid opening bank accounts or using banking services, opting instead for cash-based transactions or informal financial systems.
