THE EXORBITANT CHARGES OF COMMERCIAL BANKS IN NIGERIA; A BROAD DAYLIGHT ROBBERY
N14.1 Billion! That’s how much was reportedly remitted by Nigerian Deposit Money Banks (DMBs) from exorbitant charges, taxes, and levies deducted from millions of bank accounts owned by Nigerians in 2023.
The taxes which include commissions, VATs, overdraft fees, stamp duty charges, out-of-network ATM fees, insufficient fund fees, debit and credit transfer charges together make up an increasingly worrisome form of extortion many Nigerians lament as unethical, especially in the face of growing hardship.
“The rate at which the DMBs also known as commercial banks in Nigeria extort money from her customers is uncalled for,” an aggrieved citizen lamented, “ a N10,000 transfer is often received as N9,9xx thereby defeating the purpose of the wholesome transaction. The government must look into banks and financial institutions fleecing customers through excessive charges and unauthorized deductions.”
Citizens have continued to express displeasure over some of these charges like the one-off N50 stamp duty charge for every transaction above N100,000 which was designated as a revenue source for the Federal Government following the introduction of the Electronic Money Transfer Levy (EMTL) (Finance Act 2020).
In the face of inflation, unemployment and economic crisis, such charges ought to be abolished by a considerate government given the existence of other tax avenues like the VAT. Now banks have made it worse with the injection of domestic extortion tactics under the guise of EMTL.
With these hard-biting charges in place and unchecked, commercial bank customers now find the practice of saving their hard earned money at the bank, counterproductive, as banks continue to double their annual turnover, compensate with suboptimal interests, whilst extorting these ludicrous charges.
Last November, the nation’s President, Bola Ahmed Tinubu, admitted to the growing hardship in Africa’s most populous nation even as over 50 million citizens continue to live on less than 1% a day.
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NEED TO RESTORE FUEL SUBSIDY IN NIGERIA, ASSESSING THE COLOSSAL DAMAGE TO THE ECONOMY.
To put into perspective over 97% of the 70 million registered bank account holders in the country do not have up to N500,000 ($386) in their account according to the NDIC. This portrays the dire state of Nigerians in need of financial help, not helpless extortion by banks.
With no action in place, customers of different commercial banks still groan over excessive charges on their accounts.While financial institutions must maintain their operations by way of charges, the frequency, volume and intensity of these charges have become quite alarming. It portrays banks as hell-bent on massive enrichment at the expense of the poor customers.
Nigeria’s Federal Government and Central Bank of Nigeria must look into excessive charges and illegal customer deductions by commercial banks operating within the country.