Reps Tell Commercial Banks To Stop Excess Charges, Illegal Deductions

The House of Representatives yesterday asked commercial banks operating in the country to stop excess charges and illegal deductions from their customers.

The call came as the House unanimously adopted a motion by Godwin Offiono from Cross River at plenary.

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

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

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The lawmaker acknowledged that apart from Stamp Duty, bank customers also pay Value Added Tax (VAT) charges applicable on all VATable transactions in their account.

Offiono said: “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 customers’ consent, as stipulated in the Central Bank/Chartered Institute of Bankers of Nigeria (CIBN) guideline.”

He expressed concern that the creation of charges not recognised in the Central Bank Guide to bank charges is a common practice by commercial banks.

He also expressed concern about “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.”

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According to him, when affected customers attempt to lodge complaints to the banks’ customer care units, they are treated with disdain.

While adopting the motion, the House mandated the Committee on Banking and Currency (when constituted) to investigate the issue of excess charges and illegal deductions by commercial banks in Nigeria and report back within four weeks for further legislative action.