How banks exploit customers’ ignorance to shore up revenue base

By Odunewu Olusegun

Bank customers have become clearly unhappy with the sporadic debits from their deposits. Indeed, the social media is replete with reports from very angry bank customers, who consider these deductions as a rip-off of their hard-earned incomes.

At the end of every financial year, these little but regular amounts chopped off from various account holders run into billions of naira and form a major source of revenue for most of the banks in Nigeria today.

An elderly customer of a first tier bank, Olaoye Akande, accused Nigerian banks of extortion by tricks.

“Nigerian banks are too money conscious. Withdrawing money, they would charge for debit. If you credit your account, they will charge you for putting money in your account. The way the banking sector treats its customers is very unfair. What if customers no longer put money into the bank, how would they survive?”

A First bank user, Ifeoma Okeke is not happy with her bank as she claims they charge her more than N200 for monthly SMS. According to her, she doesn’t see the need for the use because some of the SMS sometimes doesn’t make sense.

“They would send alerts for debit and credit which is normal but sometimes the credit is not even normal credit but their own bank transaction. Most of their SMS are for information like quick banking, bank maintenance fee and the likes. Aren’t those types of messages supposed to be free?  So why do I get charged for something like that?

Meanwhile a banker who craved anonymity said, “We have lots of customers who have made their complaints about not being able to withdraw more than N10, 000 from other banks. What they should understand is that an ATM is not supposed to attract any charge until after the third withdrawal in a month and besides if one is using their bank’s ATM they can withdraw as many times as they like without getting charged at all.

While the Central Bank of Nigeria has put in several measures to curtail the excesses of the banks with the new guide to charges by banks in December, 2019 which reduced some charges, or completely cancelled some, Banks still create a way to circumvent these guidelines in order to beef up their revenue base.

Some of the changes introduced in the revised guide included: a graduated fee scale for electronic transfers to replace the old flat fee of N50. Card maintenance fee for current accounts was also abolished while saving accounts now attract a maintenance fee of N50 per quarter from N50 per month.

Similarly, ATM charges were reduced to N35 after third withdrawal within a month from N65, and so on and so forth, but despite the intervention of the CBN, many Nigerians still complain of arbitrary charges on their bank accounts.

Ayankunle Babatunde, a trader, said the amount a particular new generation bank charged him for “Card Maintenance” prompted him to close his account after several years of running it.

“The charges are just too crazy,” he said of the amount deducted from sundry services. “It is not even worth it.”

“There are some traders I know who would not open an account,” said another trader in Lagos. “They handle cash. They ordinarily will not trust any bank with their money but even if they want to, will they go ahead with all these stories of arbitrary charges that we have in Nigeria?”

Also, Blessing Okugbe, an undergraduate, explained that although students’ accounts are easy to open because they attract “zero balance”, some of the charges effected on those accounts could be disheartening.

“They allow you to open the account without any money; savings account. But when you carefully calculate the charges they deduct for card maintenance and all that, you’d realize nothing is free,” she said.

She explained that because they are students, there is a limit to how they can cope with the arbitrary charges.

According to a finance and public policy expert, Jide Ojo, even the issue of removal of charges on ATM withdrawal has been grossly flouted by banks. Unlike before when bank customers can withdraw up to N40, 000 at once, now you can only withdraw N10, 000 at once.

Bank customers in Nigeria have continually lamented the arbitrary imposition of various charges and several cases relating to failed banks transactions, fraud and so on.

In recent times, cases of failed bank transactions without early or no refund have taken a toll on banks transactions, and calls are constantly being made to the apex bank to correct the rising trend.