The Senate recently asked the Central Bank of Nigeria (CBN) to suspend ATM card maintenance charges deducted from customers. This followed outcry by customers that these charges are arbitrary and illicit. The action by the senate is not only unprecedented; it is also a step in the right direction. Everything must be done to realise this order.
It is recalled that not too long ago, banks introduced a 600 per cent increase in Debit Card Maintenance Fee from N100 per annum to N50 per month. This unwanted action drew the ire of the Consumer Advocacy Foundation of Nigeria (CAFON) who consequently campaigned for the closure of one million accounts by customers which was tagged, #Close One Million Bank Accounts.
The consumer advocacy group had alleged that the Central Bank of Nigeria and other Nigerian banks took undue advantage of Nigerian consumers by ripping them off their hard earned money. It lamented that bank policies allegedly create an avenue for multiple deductions from bank accounts, leading to public outcry against the CBN’s directive to increase approved bank charges which had taken effect since May 1, 2017.
It is true that when opening a new account, customers agree to be charged certain sums for the services rendered by banks on their behalf. But unknown to them, they are playing into the hands of the banks as these charges are taking unwholesome shades in the form of duplicity, disproportionately high debits and unclear deductions. Some are even hidden charges.
These deductions may sometimes appear small but when aggregated in the course of a year, they sum up to staggering amounts. These sums while they represent juicy gains for the banks represent substantial losses for customers. Gnawing away at customers’ disposable income especially at a time when the economy is depressed or at any other time for that matter, does not only weaken their purchasing power, it is also unconscionable. Yet these unethical deductions form a part of banks non interest income and adds to the bottom line. This is irresponsible pursuit of profit and must be condemned in the strongest of terms in the least and curbed at most.
What is worrisome about the barefaced practice by banks is that, in some cases, they blatantly ignore directives to the contrary by the highest monetary authority, namely the CBN. It will be recalled that CBN had banned banks from charging C.O.T on current account and replaced it with a more benign charge-Current Account Maintenance (CAM) Fee- yet some banks continue to charge C.O.T in addition to the CAM, a situation which has come to be known as double coincidence of charges in banking circles. The denigrating act amounts to no more than a smart alec response to constraints imposed by the Treasury Single Account (TSA) and a weak economy, among other profit shrinking factors.
The resort to outfoxing customers may well be a reflection on the lack of creativity in the banking system in a fragile economy with thinning effect on margins. It may also be a sign that bank models are unravelling and may need tweaking or wholesale makeovers in the face of a shrinking economy.
The banks resort to obtaining by trick (OBT) may push the very small savers out of the banking sysyem thus dealing a blow to the CBN’s financial inclusion policy; smaller savers form the bulk of bank customers. It therefore stands to reason that the CBN must take action now and bring erring banks to order. In line with that, the CBN should come clear on what banks can charge on and educate the banking public of same. Customers must know their rights in this matter.
When customers know their rights then they can seek redress for being fleeced off their hard earned naira. This means that there should be avenues virtual and real to treat their complaints. Where the banks are found wanting, apart from being penalised, should be made to make refunds. This is in addition to helping banks adopt the highest customer service ideals. Anything short of this will amount to short-changing the bank customer and depriving them of the full benefits derivable from their bank account.
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