Bank charges and financial inclusion project
These may not be the best of times for bank customers who are reeling under arbitrary and excessive charges. These include charges on cost of transactions, Automated Teller Machines (ATMs), SMS alerts, and Over-The-Counter (OTC) services.
Recently, the Central Bank of Nigeria (CBN) said it recovered, through its Consumer Protection Department set up since 2010, N6 billion from banks as excess charges deducted from customers, a revelation that may have justified series of complaints, by customers, of exploitation by banks.
“In the last one year, we recovered about N6 billion unjustified charges by banks on their customers. And that is a small percentage of excess charges. We are requiring every bank to invest in consumer protection because it is very critical. Until there is consumer protection, there would not be financial inclusion,” CBN Governor Sanusi Lamido Sanusi said.
Just last week, CBN said that effective April 1, Deposit Money Banks (DMB) and Discount Houses are expected to commence a gradual phase-out of commission on turnover (COT) charges on debit transactions on current account beginning from N3 in 2013 to N2 in 2014, N1 in 2015, and N0 in 2016. In fact, CBN said banks should not charge COT on returned outward clearing cheques, reversal of transactions and all bank-induced debits for which they have been charging.
Interestingly, however, bank customers are becoming increasingly inquisitive on details of transactions on their accounts following series of deductions and charges for services which are, in most cases, either not well delivered or not delivered at all. Some customers are becoming daring and are now demanding for evidence of some transactions and past records of services claimed to have been carried out by the banks on their behalf.
We commend the CBN for its efforts so far. We, however, suggest that the central bank should go beyond moral suasion and compel banks to be considerate with charges as it is only by so doing that its financial inclusion campaign will become meaningful and successful.
More importantly, the CBN should ensure implementation of the revised Guide to Bank Charges released last week, in which it stated, among others, that there will be no charge on debits representing transfer to other accounts in the same name, in the same branch or at another branch of the same bank; and that management fee, which covers processing and appraisal fee (one-off charge), is negotiable subject to one percent of the principal amount granted.
In a circular signed by I. T. Nwoha, acting director, Financial Policy and Regulation Department, CBN said the Guide to Bank Charges, which was first issued in 2004, was meant to provide a standard for the application of charges in the banking industry and to minimise conflicts between banks and their customers. But this has not been achieved.