THE Consumer Advocacy Foundation of Nigeria (CAFON) issued a statement last week to decry excessive bank charges in Nigeria. It is also mobilising Nigerians to join a national “No Banking Day” protest on March 1 to drive home the point. It is yet uncertain if the foundation would persuade enough Nigerians to join the protest, but its direct action seems indicative of how angry many bank customers are about the treatment they are getting from their banks.
Banks and bankers all over the world have a reputation for being prudent, discreet and commonsensical in matters concerning their customers’ deposits. That is the centuries-old secret of the prosperity of the industry through the ages. Nigerian bankers should not blow this tradition.
It is a well known fact that banks are vital to the economic well-being of the country. We believe their customers will readily pay reasonable charges for the services that they render, but the problem is that the banks tend to over-charge these customers, with the excessive charges becoming a huge burden.
The CAFON leadership has, indeed, accused the Central Bank of Nigeria (CBN) of not doing enough to prevent banks from exploiting customers. In apparent reaction to that accusation, the CBN’s Director of Corporate Communications, Ibrahim Mu’azu, issued a statement on February 20, to the effect that the CBN is against the fleecing of customers under any guise. Indeed, the apex bank says it has mandated the deposit money banks to refund N6.2 billion excess charges on cost of transactions for 2015 alone. This refund, the CBN said, arose from more than 6,000 complaints of unauthorised bank charges brought to its notice.
The CBN deserves commendation for its prompt response to the problem of excessive charges and its invitation to the public to report instances of such charges to its consumer protection department. The consumer protection department is probably the least known department in the CBN and it should not be. Unless the CBN merely set up the unit as a window dressing or for its propaganda value, Nigerians should be widely informed about its existence and how to get it to address their complaints against the banks.
The CBN should, in everybody’s interest, publicise the “Revised Guide to Bank Charges.” That way, customers will know the charges that the CBN approved for banks. There are too many Nigerian customers in court with their banks over bank charges.
The trust that ought to exist between bankers and their customers seems to have taken a hit since the financial meltdown of 2008-2009 which brought the world economy to the brink of depression. Because it was easily traced to the doorsteps of the world’s big banks, the massive “occupy Wall Street” protests in the United States and many world capitals were the demonstrations of ordinary citizens against the perceived greed, imprudence and exploitation of customers by bankers.
Every economy is as strong as its banks. But the greed of these institutions will not help the economy. Banks must encourage Nigerians to keep their money in the banks, not scare them away with excessive charges. Excessive commissions on transactions, huge ATM charges, onerous overdraft interest charges, charges for introduction letters, periodic statements and regular forms like deposit and transfer forms, and the new stamp duty, are disincentives to bank customers.
We believe Nigerians are willing to pay for banking services. They don’t want their banks to collapse. They like their banks to thrive, but not excessively at their own expense. The banks should be creative in the ways they make their money, but must be careful not to be seen as exploiting their customers.
The CBN should not merely strengthen the capitalisation of the banks, it should also encourage them to be customer-friendly. There are Nigerians who could return to keeping their money outside the banking system if banks become too greedy, costly and inconsiderate in their charges. Banking chiefs must be wise not to kill the goose that lays the golden egg.