How Commercial banks in Nigeria ripped-off customers

• Pay peanuts on savings
• Charges mandatory N4 per SMS alert

By Odunewu Segun

Commercial banks in the country have continue to rip off customers with low interest rate negotiations on their deposit, while widening the lending rates, a situation that has reduced their respective costs of capital considerably, National Daily findings has revealed.

While the depositors earn “peanuts”- an average of 4.2 per cent and 8.51 per cent for savings and term deposits respectively, the same customers pay as high as 29.3 per cent for borrowing.

Consequently, the spread between the average savings deposit and maximum lending rates, also widened by 0.27 percentage point to 24.86 percentage points at the end of February.

Meanwhile, there are reports that banks in the country reportedly earned about N138bn as at end of 2016 as fees they charge customers for use of their various electronic banking services.

National Daily gathered that the shift to non-interest income by banks was partly a result of huge bad loans and subsequent losses incurred by banks who were largely into interest income businesses, principally, credit creation.

Earlier this year, a court ruling stopped the deduction of stamp duty from customers account by banks for the Nigerian Postal Service, National Daily gathered that banks are disregarding this court order.

Further checks revealed that despite this court ruling, some Deposit money banks (DMBs) in the country have alerted their customers of their plan to deduct two months arrears of stamp duty this month.

ALSO SEE: CBN suspends new charges, direct banks to make refunds

According to a text message from one of the banks on Wednesday, they are set to deduct stamp duty for transactions carried out in December 2016 and January 2017 in May 2017.

But the Central Bank of Nigeria (CBN) has dismissed the rumours making the rounds that Stamp Duty has been suspended alongside the new charges on cashless policy.

According to its Director of Banking & Payments System Department, Mr. Dipo Fatokun, the suspension of the nationwide implementation of the excess withdrawal/deposit processing charges has nothing to do with the stamp duty, charged by banks for money received into the accounts of their customers’ via electronic transfer, cash and cheques.

It would be recalled that sometime last year, over 50 million bank customer across the country moved to shun banking related services, due to what they called commercial banks exploitation through illegal and excessive charges.