Multiple bank charges rise on CBN endorsement as Nigerians pay on average N3.5bn monthly
As Nigeria’s National Assembly meet the Central Bank of Nigeria (CBN) and other banks in Africa’s largest economy over high interest rates on loans granted to Nigerians, many bank customers have also expressed hopes that the Senate will also quiz the apex bank and other deposit money banks on the numerous bank charges customers have been subjected to in recent times.
The banking public has been subjected to all manner of charges even on dormant accounts, from stamp duty, account maintenance fees, withholding taxes, SMS alert charges to card maintenance fees.
The banks in their various communications to customers have always tried to exonerate themselves from the increased charges, often saying they were carrying out the CBN directives, especially on the obnoxious SMS alert charges that many customers would not want to subscribe.
Based on data from the Nigeria Interbank Settlement Systems (NIBSS), which indicate that total active bank accounts in the country amounted to 67 million in February, Nigerians may have been paying on average over N335 million if stamp duty alone is taken into consideration. When this added to online transfer charges, sms alerts and card replacement fees, Nigerians could well be paying up to N3.5 billon in a month.Image result for nigerians using atm.
Businessamlive survey indicates that Nigerians are not happy and want government to come to their rescue.
Olayinka Oladipo, a retail kerosene dealer, stated that she had complained endlessly about the various charges imposed on her every time she carries out transactions on any of her accounts.
“I’m fed up with these charges. Its as if they can’t wait for any money to come into the account before deducting their charges from it. Maintenance fees, charges for sms alerts, it goes on and on,” she lamented.
According to Bosun Lukman, a businessman who has accounts with Ecobank Plc., Oba Akran Way, Ikeja, he now gets sms alerts at the end of every month informing him of maintenance fees deducted on his current accounts. Apart from this, there is charge on every sms alert.
According to Lukman, all complaints to his bank and his account officer have not stopped the multiple charges. “Despite all my complaints, nothing has ever been done; they keep telling me that they will work on it, they will do something about it, and so on. What can we do? We can’t do without banks, can we?” He asked with a note of resignation.
It would be recalled that the CBN re-introduced the Remote-on-Us charge of N65 effective September 1, 2014. Though all ATM cash withdrawals on the ATM of issuing banks are free, the Remote-on-Us transaction fee of N65 is charged after the third withdrawal by a customer who uses the Automated Teller Machine, ATM, of other banks who are not the issuers of his or her debit or credit card.
Some other customers have mentioned other charges that include the charges on the use of their mobile App; charges for online bank transfers; some banks have also increased the cost of replacing lost or expired debit or credit cards from N600 to N1000.
Another frivolous bank charge for Nigerians are now subjected is the monthly card maintenance fee. A bank customer who chose to remain anonymous revealed that he received an sms on June 1st notifying him that he would henceforth be charged N50 on his ATM card based on CBN directive. The sms, sent from Diamond Bank plc, to the customer’s cell phone read: “Effective May 1st 2017, you will be charged a monthly card maintenance fee of N50 on your Debit card in line with CBN directive.”
The CBN’s new Guide to bank charges released in May 2017 directed banks to revise the N100 annual charge on cards to N50 monthly as debit and credit card maintenance fees, with all foreign currency denominated cards to be charged $20 or its naira equivalent annually. The revision means that instead of paying N100 every year for each credit or debit card, bank customers will now pay a total of N600 annually, which is a 600% increase at a time when Nigerians are still trying to grapple with the hardship visited on them by the recession.
There is also the Stamp Duty Charge. Though its introduction was greeted with criticisms, the charge has remained. It would be recalled that on January 19 2016, the Federal Government, in a circular through the CBN, directed all deposit money banks to begin the Stamp Duty Charge.
The circular, stated in part, “With immediate effect, all DMBs and other financial institutions shall commence the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and Federal Government Financial Regulations 2009, that is, all receipts given by any bank or other financial institution in acknowledgement of services rendered in respect of electronic transfer and teller deposits from N1,000 and above.”
It is estimated that with the N50 deduction on every withdrawal made by account holders, deposit banks are making N1.462 billion on card maintenance every month, and N17.544bn annually.
As if these charges are not enough, banks now charge N3,500 up from N2,500 for replacement or new hardware token while a software token which was N4 per sms, now goes for N20.
For many Nigerians, the CBN is complicit in the excessive charges being imposed arbitrarily on customers. A case in point is when the CBN reversed itself after the commencement of its Zero-CoT, which took effect from January 1, 2016. The CBN directed the banks to begin to charge a fee not exceeding N1 per N1,000 for all withdrawals from current accounts.
As stated by Lukman, though the banks have shown an insensitivity to their customers, Nigerians seem powerless to resist the excessive, arbitrary charges for now, since the banks have the backing of the CBN, and by extension, the Federal Government.
By Niyi Jacobs