Motion Sponsor, Godwin Offiono says “Commercial Banks are charging outrageous interest on loans and overdrafts at a rate that is higher than the agreed rate in the offer letter.”
The House of Representatives on Tuesday urged commercial banks operating in the country to put an end to excess charges and illegal deductions from their customers.
This call followed a motion presented by Rep. Godwin Offiono (PDP, Cross River), which the House unanimously adopted during Tuesday’s plenary.
Presenting the motion, Offiono noted that some banks and financial institutions in Nigeria indulge in the unethical practice of fleecing their customers through excess charges and unauthorised deductions.
He also notes that customers of different commercial banks are groaning over excessive charges on their accounts. The financial institutions known as Deposit Money Banks (DMBs) have reportedly introduced different deductions to increase their income, a development that is uncomfortable with customers.
The lawmaker acknowledged that apart from Stamp Duty, bank customers also pay Value Added Tax (VAT) charges applicable on all VATable transactions in their account. Offiono said, “Commercial Banks are charging outrageous interest on loans and overdrafts at a rate that is higher than the agreed rate in the offer letter.
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.
“Also concerned about the wrong application of maintenance fees, banks overcharging maintenance fees, the inclusion of transactions exempted from maintenance charge, loan liquidation and bank-induced transactions amongst others.
Worried that as affected customers attempt to lodge complaints to the Bank’s Customer Care they are treated as beggars without result,” the lawmaker argued.
In adopting the motion, the House mandated the Committee on Banking and Currency (when constituted) to investigate the issue of excess charges and illegal deductions by commercial banks in Nigeria and report back for further legislative action, within four weeks.