House To Probe Excess Charges, Illegal Deductions By Banks

The House of Representatives has mandated its Committee on Banking and Currency, when constituted, to investigate the excess charges and illegal deductions by commercial banks in Nigeria and to report to back within four weeks for further action.

This resolution followed the adoption on the need to stop the excessive charges and illegal deductions by commercial banks in Nigeria sponsored by Hon. Godwin Offiono during plenary on Tuesday.

Offiono noted that some banks and financial institutions in Nigeria indulge in the unethical practice of fleecing their customers through excess charges and unauthorised deductions.

“Customers of different commercial banks are groaning over excessive charges on their accounts. The financial institutions known as Deposit Money Banks (DMBs) have reportedly introduced different deductions to increase their income, a development that is uncomfortable with customers.

“Apart from Stamp Duty, bank customers also pay Value Added Tax (VAT), charges applicable on all VATable transactions in their account. Commercial banks are charging outrageous interest on loans, and overdraft at a rate that is higher than the agreed rate in the offer letter. The arbitrary increase in the interest rate on loans and overdrafts and increase in the other fees without notifying and getting customer’s consent as stipulated in the Central Bank of Nigeria/Chartered Institute of Bankers of Nigeria (CIBN) guideline.”

He however stressed that the creation of charges not recognized in the Central Bank Guide to Bank Charges is a common practice by commercial banks.

“The wrong application of maintenance fees, banks overcharging maintenance fees, the inclusion of transactions exempted from maintenance charge, loan liquidation and bank-induced transactions amongst others.

“The House is worried that as affected customers attempted to lodge complaints to the banks’ customer care, they are treated as beggars without result,” the motion read.