Bank Customers Groan Under Burden Of Charges

In 2020, despite the pandemic and the downturn in economic activities, 12 commercial banks had jointly pulled in N933.16 billion in profits and made N216.52 billion from charges on electronic transactions, as customers continue to complain of excessive fees that they are being charged.

The banks are FBN Holdings, Access Bank, United Bank for Africa, Wema Bank, Sterling Bank, Zenith Bank, Guaranty Trust Bank, Stanbic IBTC, Ecobank, Fidelity Bank, Union Bank and FCMB had also seen an increase of 2.3 per cent in the revenue from fees and commission last year.

In total, they made N825.23 billion last year from fees and commission compared to N806.87 billion made in 2019 and to bank customers. Fee and commission income of banks include account servicing fees, investment management and other fiduciary activity fees, sales commission, placement fees and syndication fees, revenue from electronic banking transactions, card maintenance fees and others are recognised as the related services are performed.

For many bank customers who spoke with Leadership about stamp duty charges, account maintenance charges, card charges as well as SMS alert charges which are the most complained about. Many of them were of the view that the charges ought to be reviewed downwards further.

Whilst some were of the view that though some banks charge them unnecessarily, the charges are still reasonable. The general consensus was however against the stamp duty charge, as all those whose opinion were sampled said there is no reasonable excuse for it other than to generate money for the government.

CBN deputy governor, Financial System Stability, Aisha Ahmad had mentioned that efforts are being put in place to lower the cost of deploying services by banks through many services initiatives. According to her, a cut in bank charges had been one of the factors being canvassed for the country to be able to achieve its financial inclusion goals of the country as the CBN plans to achieve a financial inclusion target of 95 per cent by 2024.

In December 2019, the Central Bank of Nigeria had issued a revised guide on bank charges which became effective on January 1, 2020. The guide had made some major cuts in fees that banks charge customers, one of such is the reduction in electronic transactions.

According to the guide, electronic transfers of N5,000 and below will have a N10 transactions cost plus VAT and transfers of above N5000 but below N50,000 now attract N25 charges plus VAT, while transfers above N50,000 attracts N50 charge plus VAT. The charges on electronic transfers had been cut from N50 which most banks were charging.

As against the N65 previously charged by banks after third withdrawals on remote- on-us ATM transactions, the CBN had insisted that bank do not charge above N35 per withdrawal. However customers complain that they are still charged N65 and some banks make the charge on every remote-on-us withdrawal, irrespective of if it is the first or second in the month.

Also, maintenance charges on cards was cut from N600 spread through the year to N200, a N400 shave off from what card holders would have to pay banks on an annually.

Also maintenance charge for foreign currency card holders was also cut down to $10 or its equivalent from the previous charge of $20 yearly. Other major changes in the charges include removal of Card Maintenance Fee (CAMF) on all cards linked to current accounts. Other reductions include Advance Payment Guarantee (APG) which was pegged at maximum of one per cent of the APG value in the first year and 0.5 per cent for subsequent years on contingent liabilities.

The guideline also stipulates an interest rate minimum of 30 per cent of monetary Policy Rate (MPR), the latest guide also stipulated that a one-off charge of N1,000 be applied to the issuance of cards, irrespective of card type (regular or premium) compared to N2,000 that was being charged by some banks. The same one-off charge of N1,000 applies for the replacement of debit cards at the customer’s instance for lost or damaged cards.
According to the guide, there will be no more charges for reactivation or closure of accounts such as savings, current and domiciliary accounts while status enquiry at the request of the customer (like confirmation letter, letter of non-indebtedness and reference letter) will now attract a fee of N500 per request.

On Current Account Maintenance Fee (CAMF), the Guide expressly stated that this would be applicable only to current accounts in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. It emphasized that CAMF is not applicable to Savings Accounts.

As the 2019 Finance Bill became effective in February 2020, banks were required to deduct N50 stamp duty due on every transaction, from customers account. The Bill which took effect in February last year stipulates that the N50 stamp duty charge would be levied on electronic payments above N10,000 as against payment above
N1,000 which had previously been proposed.

The stamp duty charge is deducted on every transaction that is N10,000 and above
irrespective of the account type, savings or current and then remitted to the Treasury
Single Account resident with the CBN. The N50 charge had been the source of squabble between the Federal Inland Revenue service and the Nigeria Postal Service last year.

Many banks had immediately begun deducting N50 stamp duty from all transactions above N10,000 made from bank accounts including savings, current and corporate accounts in the country in compliance with the 2020 Finance Bill.

In April last year, customers of Access Bank had attacked the bank on social media after it compiled and deducted three months’ worth of stamp duty charge at once.

After trending for more than four days on most social media platform the bank had tried restoring its image by offering to refund customers and pick up the stamp duty fees.

A female nurse, Uche Pius speaking with Leadership said “I don’t understand the bank charges, at times if you decide to transfer money on your mobile phone the bank charges suppose to be N10 but you will be seeing N100 as bank charges and there is no alert that the money was removed or anything.

“I think the bank charges need to be looked into. It is like there is nobody regulating it, they (the banks) just remove charges because they know nobody is going to the bank to complain about N50 or N20 it will just look ridiculous do they just keep doing it over time and nobody talks about it. It needs to be regulated and there should be an alert for it. It needs to be regulated.”

For Obinna Ani, a software engineer, his grouse is with the withdrawal charges as well as card and account maintenance charge. According to him, banks charge more than they are supposed to and complaining does not do anything to rectify it. “They said after eight withdrawals N65 will be deducted but at the end of the month instead of seeing N65 you will be seeing N300 or more than that as bank charges or liquidation and it can be deducted like three times in a month, at times even without using the ATM they still deduct money calling it maintenance or liquidation fee and it happens every month.

“I had to withdrawal all my money in that account. Unlike what we were told growing up that money in savings account appreciate, these days, money kept in savings account depreciate. A friend of mine who had like N100,000 in his account before he left the country came back four years later to meet an empty account. They were just deducting charges on an account that was not even in use.

A writer, Ngozi Stanley-Obi whilst noting that banks are businesses and need to make profit opined that some of the charges are unnecessary. Ifeanyi Chukwu, a videographer and editor, said on a monthly basis, his bank account take a hit from several charges.

“I have a savings and a current account. Charges on the savings are OK, but the charges on the current account are too much. With the volume of transactions I do, I get charged not less than N10,000 monthly. The charges are mostly stamp duty charges, which is from the government and SMS alert.”

An accountant, Itoro Bassey noted that she had gotten a N600 debit for SMS alert,
an amount she says is over the top. However she did not complain to the bank
because of the hassle of going into the banking hall.

Although, Leadership reached out to some banks most did not respond. An email
response received from Oluseye Omiwole, Wema Bank’s Team Lead, Prepaid Cards, Cards Business & Service noted that the bank’s chargers are in consonance with the guide that the CBN had released in 2019.

According to him, the bank charges its customers card issuance fee of N1,000, VAT exclusive, quarterly maintenance fee of N50 per quarter, VAT exclusive and withdrawal fee outside the issuer bank of N35 per withdrawal, after the third count of transaction in the month.

He explained further that Wema Bank's foreign exchange mark-up fee is based on the exchange rate, transaction amount on foreign currency-based merchants might be higher than what the merchant has set. This rate depends on the market risk analysis.

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