The House of Representatives has asked commercial banks nationwide to avoid charging clients excessive charges and making illegal deductions. The House passed the motion after Rep. Godwin Offiono (PDP-Cross River) proposed and received approval for the motion during Tuesday’s plenary session in Abuja.
In his motion, he stated that some Nigerian banks and financial institutions engage in the unethical practice of defrauding their consumers through excessive charges and unlawful deductions.
He said that clients of various commercial banks complained about high charges on their accounts and that financial organizations known as Deposit Money Banks (DMBs) had purportedly implemented multiple deductions.
According to him, this was done to boost their income, a trend that customers find unsettling.
“Apart from Stamp Duty, bank customers also pay Value Added Tax (VAT) charges applicable on all VATable transactions in their account.
He said commercial banks charged outrageous interest on loans and overdrafts at a higher rate than the agreed rate in the offer letter.
He criticized the arbitrary increase in interest rates and fees on loans and overdrafts and the lack of customer notification and consent, which goes against the Central Bank/Chartered Institute of Bankers of Nigeria (CIBN) guideline. Godwin also voiced concern over Commercial Banks’ widespread practice of imposing charges that the Central Bank Guide to Bank charges does not recognize.
Furthermore, Godwin expressed concerns about banks misusing maintenance fees, overcharging customers, and including transactions exempted from the charges. He also mentioned issues like loan liquidation and unauthorized bank transactions. He criticized the poor treatment of affected customers who tried to file complaints. The House passed a motion to investigate excessive charges and illegal deductions by commercial banks and assigned the Committee on Banking and Currency to oversee the investigation and the Committee on Legislative Compliance to ensure implementation.
cc: Vanguard Ng
