Commercial banks are desperate to push up their dwindling revenue. With costs of operation rising, they are looking for ways to pass the burden to customers, high net-worth individuals and businesses as well as corporate bodies. The Central Bank of Nigeria’s (CBN’s) recently-introduced stamp duty charge, account maintenance fee and other market-induced turbulences are meant to shore up revenues. But as COLLINS NWEZE reports, customers are resisting these fees and demanding transparent, secure and affordable banking services.
When Martins Oriseh, a Lagos automobile merchant, entered the branch of a new generation commercial bank on Allen Avenue, Ikeja-Lagos, he was full of confidence.
Everything had gone well until he demanded for the balance of his account to enable him transfer N1 million to a business associate. Minutes later, his poise and confidence caved in to anxiety and frustration.
“I am talking about my corporate account balance, not savings. That cannot be the balance because I made a cash deposit of N500, 000 to the account two days ago,” he told the customer service officer, who for the second time, crosschecked and confirmed the account balance.
Oriseh was wrong. It was the right account except that the balance had reduced by N40, 000 after the lender took all ‘outstanding fees’. The transfer was done only after he made another cash deposit of N50, 000 to cover the newly introduced account maintenance fee and stamp duty charge.
Another customer, Richard Ibilola, who is the Managing Director, Dabori Nigeria Limited, who operates a corporate account with the Ilupeju, Lagos branch of Access Bank Plc., was luckier.
Mid-February, he was woken up by an SMS alert on his phone which showed N45, 000 credit to his account. The alert came with the title: ‘excess charge refund for January to October 2015’. For an account operated since 2006 without any such occurrence, the gesture, to him, was suspicious.
“The bank said it is for excess charges from my account between January and October 2015, though I did not lodge any complaints. It was a big surprise to me because I was not expecting it,” Ibilola told The Nation.
But, that ‘Greek gift’ got him thinking. “Since the account is not a loan account how come the bank took this much as ‘excess charge’ within such a short period? Will I be able to get more refund if I probe further into what happened in the past eight to nine years? The entrepreneur has been struggling to find answers to these and many more questions troubling his mind.
Yet, another customer, Dr. Ted Iseghohi Edwards of Edwards & Partners Law firm is relying on judgment delivered by a Federal Capital Territory (FCT) High Court sitting in Apo, Abuja, to recover N5.3 billion illegally withdrawn by GTBank form his account.
Justice Valentine Ashi, in a judgment, held that GTBank was without any defence to its action and ordered the lender to credit Iseghohi’s Zenith Bank Plc. account with the refund. The judge further ordered that the fund should attract 10 per cent post-judgment interest, and another 21 per cent interest from December 12 last year when GTBank illegally withdrew the money, until the bank eventually pays Iseghohi.
The rising cases of e-payment fraud are also of serious concerns to customers. Laurence Osita, an Abuja-based businessman lost N500, 000 in one day to fraudsters. The incidence occurred in mid-February after he activated his Internet banking platform, obtained a token, chose a password and an answer to a secret question as specified by his bank to guaranty transactions’ security.
Until the disaster struck, all his transactions, including bills payment, cash transfers, and balance enquiries, among others, were done via mobile banking.
Complaints galore
“I kept receiving text messages of multiple debits from my bank. The first was N200, 000 followed by another N100, 000. Then I saw N50, 000 and finally N150, 000 debit alerts. This happened within two hours and all the calls to my bank to stop the fraudster were not answered,” he explained.
Osita said he was finding it difficult to feed his family of four after the incident.
“I was told by my bank that it was my mistake. My account officer accused me of exposing my password and token to a third party. But, that is not correct. No one had access to these details. Banking for me, is no longer safe,” he disclosed.
Oriseh, Ibilola, Iseghohi and Osita are not the only ones affected by the rising cases of excess bank charges and high-level insecurity in domestic banking.
Each of the nearly 30 million bank customers across the federation has one compliant or the other against their banks. They are also speaking out through different platforms, including the social media network.
Writing on his Facebook page, a bank customer, Chris Adetayo, accused his lender of charging him N398.1 to a dollar after he made online purchase worth $190.96. That, he said, translated to N200.6 above the N197.5 official market exchange rate.
Adetayo said: “It’s a debit card, not a credit card. So, the rate on the day of purchase should apply. After all, if the rate had been N398/$ yesterday, my buying decision could have been way different or I could have used a different payment platform”.
Maureen Akaeze said had a similar experience when she bought a product from an online store, Amazon, using her debit card, and the deduction in naira was double the price tag on the product. She said some banks now charge $10 for every withdrawal from customer’s domiciliary account.
A customer, who identified herself as Gbemisola Zubair, posted on her Facebook page: “N5, 000 was withdrawn from my account with Ecobank Nigeria while sitting in my house one Sunday. I reported to the bank, which said the transaction was done in Abeokuta”. The lender also said the ATM used was the next number to mine and were both collected on a Friday prior to the fateful Sunday.
“The bank couldn’t call the culprit but kept deceiving me until I got fed up. I had to destroy the new ATM and blocked my acct for a while. So, I had to write anytime I want to withdraw. I still insist these frauds are internal because my ATM was new and I didn’t change the Personal Identification Number (PIN) because I was in a hurry. They blamed me for not changing my PIN immediately,” she said.
Yvonne Imafidon-Agarana said: “It happened to me also. In fact, I was charged over N400 per dollar by one bank and when I switched to another bank’s debit card, the rate dropped to N299 per dollar.”
Ignatius Oli also complained. “I completely corroborate this story. That’s exactly what they have done to me. I made a transaction on the 30th of September, 2015, to Lufthansa with my debit card and they charged me way above the black market rate with same reasons. Last week, I also used my debit card and I had to call home to ask what was actually happening because the exchange rate from naira to euro was alarming. They charged me N450 to one Euro”.
Industry watchers speak
Analysts said the banks are hedging debit card transactions by keeping funds above the transaction figure in anticipation of exchange rate increase but fear the funds are never returned back to customers.
Majority of the banks, The Nation learnt, are grappling with low capital bases and depressed income margins. Poor cash flow due to huge investments in power sector projects and tough regulatory policies are depleting banks’ revenue margins.
The zero Cost of Transaction (CoT) policy, contributions to the Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) levies and high Cash Reserve Ratio (CRR) are partly to blame.
Some banks including First Bank of Nigeria Limited, First City Monument Bank (FCMB) Limited, and Diamond Bank Plc, have alerted investors that they will be declaring losses in their 2015 results. More banks are expected to make similar announcements as they channel some of the financial pressures to their customers.
No ‘Banking Day’ protest
Complaints over excessive bank charges reached new heights when the Consumer Advocacy Foundation of Nigeria (CAFON) – a not-for-profit organisation, declared March 1 as No Banking Day. That day, banks’ customers spoke in one voice against outrageous charges and poor customer services being meted to them.
CAFON President and convener of the No Banking Day, Mrs Sola Salako, urged bank customers not to use Automated Teller Machine (ATM) cards, log in to any online banking portal, transfer money on their phones, tablets, or laptops, make Point of Sale (PoS) payment, online payments, issue or present any cheque throughout that day.
She disclosed that between June December, last year, more than 400,000 customers lodged arbitrary charges complaints against their lenders.
The N100 annual debit card maintenance fee; N105 online transfer charges for every online transfer; N1 per mille (N1,000) maintenance fee; N50 stamp duty charge; three to five per cent processing fee per N1, 000 for cash withdrawals above the cash-less banking limit for individuals and corporate accounts respectively; text message fees; processing, management and draw-down fees for loan accounts among others are being rejected by customers.
Mrs Salako captures her displeasure with banks and the Central Bank of Nigeria (CBN) thus: “The CBN made ATM withdrawal free. But in another breath, it introduced N65 for every third transaction on another bank’s ATM. To withdraw N100, 000, the ATM dispenses the money five times, and one is charged N65 for each withdrawal bringing the total cost to N325. Yet, the ATM is the only option because banks cannot pay the customer the amount across the counter”.
Last week, a video of unidentified middle-aged man, stripped to his pants, crying and lamenting in the banking hall of GTBank over N150, 000 transaction error, was posted on Facebook. Within the first five hours, over 3,000 Facebook users expressed their displeasure with the lender over the man’s predicament.
When contacted, GTBank’s Head of Corporate Communications, Mrs. Lola Odedina, confirmed that the video was real but said the issue had been ‘completely resolved’. She said the customer is happy and is still with the bank.
“The customer in question is still banking with us. And it is better for us when a customer complains because it gives us opportunity to resolve whatever the issues are amicably,” she told The Nation.
But, whether or not the issue has been resolved, it is totally unacceptable that banks will make an adult male descend to this level in protest!
Customers’ complaints against banks’ arbitrary charges worsened after the CBN introduced the payment of N50 stamp duty and N100 deposit maintenance fee by customers to boost government and banks’ revenues respectively. The stamp duty will in three years add N216.4 billion to the government’s coffers while banks will earn a minimum of N120 billion yearly from the current account maintenance fee.
CBN Governor Godwin Emefiele explained that government was looking inwards at the banking sector as part of efforts to boost its revenue base through taxes and rates.
“We will try as much as possible, working with the banks to ensure that all transactions are captured in a way that ensures that for transactions of N1, 000 and above is debited N50 for the stamp duty,” Emefiele explained, urging banks and other financial institutions to back government’s revenue generation drive through compliance with the provisions of the Stamp Duties Act.
As bank customers were still analysing the stamp duty fee, the CBN also introduced a negotiable current account maintenance fee of N1 per N1, 000 just a week after the CoT fee was stopped. The new fee was meant to reduce the impact of declining crude oil prices, operation of Treasury Single Account (TSA), and other market-induced turbulences on the viability and stability of the banking system.
But, the Chairman, House Committee on Banking and Finance, Jones Onyereri, described the maintenance fee as another way of reintroducing the CoT.
He said the House has made its position known to the CBN Committee of Governors that the fee has to be stopped. For him, the policy is not in the interest of bank customers.
Other stakeholders have also kicked against the fees. President, Bank Customers Association of Nigeria (BCAN), ‘Uju Ogubunka, said although the stamp duty and maintenance fees will improve non-oil revenue, they amount to imposition of excess charges on customers’ accounts.
“CBN neither made a provision for sanctions nor expressed the intention to sanction institutions that impose these fees on savings accounts or other unauthorised accounts. This is considered a very big lacuna given the well-known antecedents of most banking and financial services providers in collecting excessive and unauthorised charges from their customers,”
