The N17bn illegal bank charges...

The recent disclosure by the Central Bank of Nigeria (CBN) that some of the nation’s commercial banks illegally withdrew N17 billion from their customers’ accounts is a dent on the corporate image of the banking sector. It is, however, heartening that the apex bank has ordered the banks to refund the money to the affected customers. The N17 billion to be refunded is the total sum deducted from customers’ accounts as at August, 2014.

Head of Consumer Protection Department of CBN, Hajia Khadijah Kassim, while making this disclosure at a forum in Calabar, Cross River State, described the illegal deduction of the money from customers’ accounts by the banks as fraud, which should not be tolerated. She explained that the CBN was compelled to act following a deluge of complaints and petitions by aggrieved bank customers across the country. About 5,500 customers’ complaints were reportedly received by the CBN between June and August this year. The deductions, sometimes in the form of hidden charges, portray Nigerian banks in bad light. These banks should do whatever is necessary to shake off this stigma.

Apparently worried by the attitude of the Deposit Money Banks (DMBs) towards the customers accounts, Mrs. Kassim said that the CBN would not allow the banks to have a field day, as far as treating customers fairly is concerned. While affirming bank customers’ right to complain whenever they are aggrieved, she urged them to always be on the alert and report whenever there are suspicious debits on their accounts. The affected banks were given a 30-day period to resolve the controversial deductions and make the necessary refunds to the account holders.

We commend the CBN for acting in the interest of bank customers on this matter. It is a step in the right direction, but the regulatory bank must ensure that its order on the refund is complied with. It is sad that banks in the country are abusing customer service, which is the cutting edge in the banking industry, through fraudulent charges on customers’ accounts. It must be stated that customers are the core reason that banks exist. Their job is to act as financial intermediaries, supplying financial services to various segments of the economy.

Therefore, the use of illegitimate means to boost their profitability is not acceptable. In other words, sharp practices such as illegal charges on customers’ accounts are condemnable. It is comforting that the CBN has responded swiftly to these illegal charges. We think the banks should also be sanctioned. It is not enough to simply ask them to refund the illegal deductions. There should be more stringent sanctions to deter banks from the despicable action. It is necessary that banks conduct their businesses with customers with a high premium on trust, integrity and utmost concern for their public image. This is necessary to guarantee their continuing perception as credible financial institutions. Although competition has become very intense in the sector, it is no reason for banks to resort to illegal charges on customers’ deposits. Banks should not sacrifice customers’ confidence for illegal financial gains.

We recall that the deduction of illegal bank charges has become a regular complaint by bank customers, yet some banks are not desisting from it. Three months ago, the CBN, in a circular dated June 12 and entitled:”Non-refund of monies to customers shortchanged by ATM non-dispense or partial error”, disclosed that many banks were arbitrarily imposing illegal maintenance fees on CoT-free accounts.

The affected banks were given a deadline of July 31 to refund the excess charges to their customers or face severe penalties in line with Section 9.1 of the Guidelines for Card Issuance and Usage in the country. It is not clear if the banks refunded the excess charges, and the punishment meted to those that failed to do so.

However, the CBN said it recovered N14.6 billion from the indicted banks in May this year, while N9 billion excess deductions were recovered last year. It is sad that the deduction of illegal charges from customers’ accounts is fast becoming the culture of Nigerian banks, in spite of the efforts of the CBN to curb it.

Altogether, we urge the relevant departments of the CBN such as the Consumer Protection and Inspectorate Division to be more diligent in their supervisory duties over the money deposit banks to avoid unethical practices that could short change customers.