Banks and excessive charges

This may not be the best of times for customers of banks who are reeling under different charges without a commensurate service. The ongoing arbitrary charges by banks through what the lenders regard as maintenance, short message service (sms) fees and other hidden charges, even in the face of declining customer service and facilities may have exposed their lack of intermediation footing.

This exploitative inclination is further fuelled by recent abolition of  commission on turnover (COT)  by both the Central Bank of Nigeria (CBN) and the banks, implementation of the Single Treasury Account and unification of both the cash reserve ratio (CRR) and the subsequent reduction of the rates, making investments in Treasury bills less attractive.

The development has exposed the lack of ingenuity and creativity on the part of banks to mobilize risk assets and also their lack of debt and commitment to intermediation. Unfortunately, these are parts of their primary responsibilities without which the economy will not grow. Besides, the current attitude of most banks is capable of jeopardizing the financial inclusion and cash-less policies of CBN.

Although the CBN’s action symbolizes the full deregulation of the industry, the opportunity is being abused through outright exploitation of the hapless customers. Unfortunately, too, the development seems to have polarized the industry as the big clients now enjoy concessionary fees and charges because of their clout and negotiating capacity while the small to medium sized businesses and individual non- discerning   clients are now at the mercy of their bankers. This is unfortunate. Some analysts have rightly reasoned and predicted that the development is capable or impacting negatively on the revenue of the country as excessive charges could lead to diversion of activities to the informal sector.

“Banks comprise a key part of Nigeria’s formal sector economy, contributing even more significantly to government revenue following the 2016 introduction of a stamp duty on banking-sector transactions. However, the diversion of economic activity from the formal banking sector risks further eroding this revenue contribution to the economy,” says an analyst.

It is against this backdrop that the Central Bank of Nigeria (CBN) should step in and ensure that this exploitation is stopped forthwith. Banks that are supposed to be agents of development should not now become agents of exploitation.