The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

How banks overwhelm customers with multiple fees




Hit by the implementation of Treasury Single Account (TSA), reduced interest rate and the zero Commission on Turnover (CoT), banks in the country have resorted to multiple charges on customers’ accounts.

Since the enforcement of the TSA, the banking industry has appeared unsettled as the easy access to government funds, at zero cost, was blocked. The development became heightened when the Central Bank of Nigeria (CBN) embarked on monetary easing which reduced the cost of borrowing, with some customers renegotiating downward their interest rates on loan, as the apex bank adjusted the monetary policy rate to 11 percent, from 13 percent.

At the last count, there were no fewer than 10 charges associated with banking activities, which are currently raising concerns among customers of banks. The charges, in no particular order, include the maintenance fees which banks are now charging on monthly basis on current accounts, and the Value Added Tax on virtually every charge against customer, including the charges on SMS alert.

There are also charges for transfers online; over-the-counter; and mobile App; Remote-on-Us (charges incurred for using other banks’ ATM to withdraw money more than three times in a month); and the recently introduced stamp duties charge.

Banks, apart from charging card maintenance fees, have also reviewed upwards the cost of acquiring cards from N600 to N1000, with a VAT charge afterwards.

These charges, though are being collected smoothly in banks without any questions, may be illegal given the fact that some of them may not have been covered in the subsisting guidelines. Again, customers are not properly briefed, especially on the frequency at which the charges hit their accounts, to allow them the opportunity to either accept or reject it.

A source from CBN disclosed that the regulator is still fine-tuning a revised guidelines on charges and fees in banks, which expectedly would come out before the end of the first quarter.

With the N115 maintenance charge already on current account, the banking industry would be making about N1.7 billion from customers monthly. The figure represents an average of N58 million daily.

The Bank Verification Number (BVN) initiative has recently identified over 55 million active accounts owned by over 22 million individuals, while there
is an estimation that about 15 million of the 55 million active accounts are current accounts, including those belonging to corporate organisations, which these maintenance charges would affect.

Besides, the online, mobile and over-the-counter transfer charge at N105 per transaction has huge potential to raise millions of Naira on daily basis for the sector, especially with the adoption of various electronic payment channels.

Receive News Alerts on Whatsapp: +2348136370421

No comments yet