Nigerian House of Representatives Urges Commercial Banks to Cease Excess Charges and Illegal Deductions

The House of Representatives in Nigeria has called on commercial banks operating in the country to put an end to excessive charges and unauthorized deductions from their customers. The unanimous decision came during a plenary session when a motion presented by Godwin Offiono from Cross River was adopted.

Offiono highlighted the unethical practices of certain banks and financial institutions in Nigeria, which exploit their customers through excessive charges and unapproved deductions. He expressed concern over reports of customers from various commercial banks complaining about excessive charges imposed on their accounts by these financial institutions, causing discomfort.

The lawmaker acknowledged that, apart from Stamp Duty charges, bank customers are also subjected to Value Added Tax (VAT) charges on applicable transactions in their accounts. Offiono emphasized that commercial banks are charging exorbitant interest rates on loans and overdrafts, exceeding the agreed rates mentioned in the offer letters. He also raised concerns about the arbitrary increase in interest rates and other fees without prior notification or consent from customers, which violates the guidelines set by the Central Bank and the Chartered Institute of Bankers of Nigeria (CIBN).

Offiono expressed further worry about the widespread practice of commercial banks introducing charges that are not recognized in the Central Bank’s Guide to Bank Charges. He also highlighted issues such as the incorrect application of maintenance fees, overcharging of maintenance fees, inclusion of exempted transactions in maintenance charges, loan liquidation charges, and bank-induced transactions.

Customers who attempt to raise complaints through the banks’ customer care units, according to Offiono, are often treated dismissively. In response, the House of Representatives has directed the Committee on Banking and Currency (once constituted) to investigate the matter of excess charges and illegal deductions by commercial banks in Nigeria. The committee is expected to report back within four weeks for further legislative action.