Reps move against illegal charges, deductions by commercial banks

The House of Representatives has directed its Committee on Banking and Currency (when constituted) to investigate the issue of illegal charges and deductions from customers’ accounts by commercial banks in Nigeria.

The decision followed a motion by a member from Cross River state, Hon. Godwin Offiono, at Tuesday plenary.

The lawmaker noted that some Banks and Financial Institutions in Nigeria were in the unethical practice of fleecing their customers through excess charges and unauthorized deductions.

According to him, customers of different Commercial Banks are groaning over excessive charges on their accounts, adding that the Financial Institutions known as Deposit Money Banks (DMBs) have reportedly introduced different deductions to increase their income.

Offiono observed that 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”, he said, adding that 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 /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.