Bank customers reel under arbitrary charges

 Bank customers are becoming increasingly concerned about the numerous deductions from their accounts and are now demanding detailed explanations. Most customers complain of inexplicable transactions on their accounts and are alleging that they are often subjected to high and arbitrary charges without commensurate service.

BusinessDay investigations reveal that while customers are reeling under high charges, the bridge banks, Mainstreet, Keystone and Enterprise, managed by the Asset Management Corporation in Nigeria (AMCON) are alleged to have engaged in a spending spree under the guise of rebranding and being information technology (IT) compliant.

Specifically, the customers are demanding evidence and proof of remittances on transactions relating to services like withholding tax, standing orders claimed to have been transmitted to the relevant agencies by the banks.

The list of their demands also includes proof of other charges on cost of transactions, (CoT), Automated Teller Machines, (ATMs), SMS alerts, Over-The-Counter services, for which deductions are made without recourse to services provided.

“I have noticed that your bank has been deducting withholding tax from interest income accruing to me through my time deposit and/or savings accounts since year 2006, but your bank has never forwarded to me any certificate of payment or credit note issued by the Lagos State Internal Revenue Service.

“I now look forward to receiving past and future certificates of payment or credit notes issued by the Lagos State Internal Revenue Service in respect of withholding tax that your bank has deducted from my interest income to date, and future deductions of withholding tax from my interest income,” said an agitated customer via short message service (sms) sent to a bank and seen by BusinessDay.

The current agitation is occasioned by further deterioration in quality of service by the deposit money banks, which have intensified efforts at sourcing cheap funds, following reduction in yields from fixed income instruments.

Indeed, the Central Bank of Nigeria (CBN) said it had recovered N6 billion from banks, as excess charges deducted from customers, through its consumer protection department since it was set up 2010.

“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,” Sanusi Lamido Sanusi, CBN governor said recently.

Emeka Onyejiaka, an analyst, said: “There is need for CBN to intensify its surveillance on banks with respect to service quality and charges,” adding that banks charge same services differently.

For instance, banks now charge between N6,000 and N7,000 as legal search fees for verifying authenticity of a company registered with the corporate Affairs Commission, (CAC) for which a customer wishes to open a corporate account. This is against N4,000 or N5,000 charged about three months ago.

Usoro Essien of the Economic Intelligence & Strategy department of Associated Discount House Group, observed that the recent strain on the naira at the Interbank market was due to a resurgence of dollar demand, along with increased liquidity in the money market, coming from a large volume of maturing instruments (T-bills and FGN Bonds). Essien added that “market participation has been cagey, as yields on new issues are less attractive.

Discount Houses, Deposit Money Banks and other market participants have opted to place their funds with the CBN at 10.0%, rather than purchase instruments at yields that offer little, or in some cases, no spread.”

But while customers are exploring ways of checking arbitrary bank charges and confirmation of transmissions, it is reported that the bridge banks are on a spending binge.

Just as the nation awaits the action of AMCON on the mode of disposing the three bridge banks, BusinessDay investigations further showed that the managements of some of the banks are involved in financial recklessness, occasioned by inflated rebranding costs, branch renovation, and acquisition of some IT platforms in their quest to be compliant in their service delivery.

There is apprehension in some of the banks, as some of the staff who expressed concern over the inflated prices have been forced to exit the system.

Mustapha Chike-Obi, managing director of AMCON, has however ruled out the likelihood of changes in the management of the banks, despite insinuations of reckless spending, instead of putting the banks on a strong footing.

 

JOHN OMACHONU