By Moses George
Every responsible government is saddled with the responsibility of providing its citizens with basic services, good leadership and to protect their interests at all times. This unquestionable responsibilities can only be achieved through proper planning and execution within government’s financial capabilities.
In the context of the foregoing, banks and other financial institutions have a prominent role to play in the life of any nation. Government agencies and the public depend to a large extent on facilities from banks and other financial institutions to enable them execute most of their plans.
Unfortunately, some commercial banks in Nigeria are said to be engaged in all kinds of nefarious practices and subjecting their customers to spurious and excessive charges. One of the areas where bank customers are reportedly short-changed is through the Automated Teller Machine (ATM) services. The ATM was introduced into the Nigerian banking system to ease problems of cash withdrawal from banks across the country. This great innovation became a tool for exploiting the Nigerian banking public. Thousands of customers were victims of what Dr. Chris Abaga, an analyst, labeled, “the ATM rip-off.” This sharp practice went on for a long time until the Central Bank of Nigeria, CBN decided to intervene.
The apex bank investigated the matter and decided that the banking public was actually being ‘robbed.’ It immediately ordered for a refund of all the money that the affected commercial banks had illegally gotten from their customers. These banks were given up to 31 July, 2015 to make the refund. According to CBN, the order it issued was in compliance with Section 9.1 of the Guidelines for Card Issuance and Usage in Nigeria. The question that many Nigerians are asking is :Was the CBN able to ensure strict compliance to this order?
Time Nigeria gathered that by May 2015, the CBN had recovered a whopping N14.6 billion from these banks. Another recovery in excess of N9 billion was also made by the apex bank last year. These recoveries emanated from the excess charges that were arbitrarily taken from customers’ deposits and other related transactions. Some commercial banks in Nigeria had obviously capitalized on the ignorance of their customers as regards banking rules and regulation to rob them of their hard earned money.
Time Nigeria investigation revealed that some of the transactions that are reportedly being used to short-change customers include Commission on Turnover (COT), which represents the commission on withdrawals; hidden loan charges; Calculating Interest with Rates Outside Monetary Regulations; Calculation of Debt Interest at an Un-agreed Rate; Calculation of Charges on Overdraft and Excess ; Backdating of Debit Value/Effective Dates; Inclusion of Unknown Cheques; VAT on Interest /Overdraft Charges and Using Unauthorized Rates for Miscellaneous Fees.
According to Joseph Anede, a financial consultant, “these rip-offs by our banks are mostly catalogues of charges disguised in scattered forms as interest on loan facilities, nebulous administrative charges, distortion of interests on deposits, plus sundry other charges that are regularly shaved of customers accounts without disclosure.’’
At the end of every financial year, these little but regular amounts chopped off from various account holders runs into billions of Naira and form a major source of revenue for most of the banks in Nigeria today.”
It is worrisome that some of these banks are no longer interested in making legitimate profits, or in the least concerned about improving their financial fortunes through better service delivery. It is disturbing that banks, where trust and transparency constitute the cutting edge, are drifting away from these corporate virtues. More facts have continued to emerge about other unethical activities of some commercial banks in this country.
Sometime last year, the Economic and Financial Crimes Commission (EFCC) nabbed 21 bankers for allegedly stealing defaced currency worth more than six billion naira. Some of those arrested included officials of the CBN and officers from eight Nigerian commercial banks. According to the EFCC, “Instead of carrying out the statutory instruction to destroy the currency, they substituted it with newspapers neatly cut to Naira sizes and proceeded to recycle the defaced and mutilated currency.”
Responding to the ugly trend in the banking sector, Ibrahim Umar, a former Branch Manager of a commercial bank , told Time Nigeria that it is true that, “all sorts of shady deals are being perpetrated by some commercial banks in Nigeria. Therefore, Government needs to urgently sanitize the sector by setting up structures for monitoring banking operations in the country.”
Irked by several complaints about this trend, the Kaduna State Commissioner of the Public Complaint Commission, Alhaji Muhammad Maude, has cautioned banks against extorting innocent customers through unfair service and interest rate charges. He lamented that some commercial banks in Kaduna State have introduced different kinds of loan packages that target low income earners, especially, teachers. He said that such facilities were deliberately designed to extort their customers through strangulating interest rates. Maude’s reaction came as result of investigations the commission carried out following several complaints it received from teachers on the matter.
“Our investigation showed that the banks give loans of N1 million or more mostly to the teachers and collect pay slip as collateral. But what we found mischievous and irritating is that the banks will give the customers the loan on a fixed interest rate and agree on repayment schedule of 12 months, including interest rate.
“For example, if you collected N500, 000 as loans and the initial agreement is that you will pay N650, 000 by the time you finished repayment within 12 months. By the time you are in the eight month of repayment, the bank will increase the repayment period by another six months, deducting the same interest rate.
“At the end of the day, these teachers end up paying almost 100 per cent of the amount they collected as interest. It is not fair to lure people to this strangulating policy. This is clearly extortion, it is unfair and unjust,’’ he said.
The Commissioner said that the commission had since lodged a formal complaint at the Central Bank of Nigeria on this matter. He added that the CBN had made contacts with the relevant authorities so as to address the anomaly. Maude assured all members of the public in the state that commission was ready at all times to look into their complaints without charging any fee.
In a related development, the Kaduna State office of the Public Complaints Commission has reportedly resolved 1, 171 out of the 2, 239 complaints it received between 2013 to 2015. Out of this figure, 435 complaints were received in 2013 out of which 341 were resolved. In 2014, 582 cases were received out of which 390 were settled. The highest number of complaints was made in 2015. That year, the commission received a total of 1, 222 complaints, and successfully resolved 440 cases. According to Maude, some of the delays recorded in resolving some of the complaints were mostly as a result of alleged “administrative impunity of government officials.”
Most of the complaints that are made to the commission include wrongful termination of appointments, non-payment of salaries, non-payment of retirement benefits and bank-related issues. Others issues brought before the commission include denial of promotion, non-payment of pension, non-payment of death benefits, land related issues, police and army- related matters and breach of contract, etc.
The Public Complaint Commission was established in 1975 with the mandate of treating issues that related to administrative injustice, either by the federal, state or local governments. The commission is also mandated to look into companies registered under the Companies and Allied Matters Acts of the Federal Republic of Nigeria. The commission’s services are free and open to both citizens and non-citizens residing in the country.
