Nigerians express concern over indiscriminate bank charges-Report

A recent public opinion poll by NOIPolls has revealed that most Nigerians (80 percent) are expressing concern over what they refer to as incessant and indiscriminate bank charges levied on their accounts by commercial banks.

The poll, which was prompted by recent media reports and commentary on bank charges and deductions from customer accounts without prior communication; also revealed that most Nigerians (71 percent) consider the various charges as simply unfair in relation to the services rendered by the banks.[1]

Similarly, the poll found that 72 percent of respondents say they have been noticing various deductions from their bank accounts; such as SMS charges (49 percent), ATM / Debit Card maintenance (46 percent) and 65 Naira charge after 3 withdrawals per month (38 percent) amongst other charges.

More findings from the poll revealed that about 7 in 10 respondents (76 percent) were of the opinion that the Central Bank of Nigeria (CBN) has not done enough to defend bank customers from the onslaught of incessant bank charges from commercial banks, particularly in this recession when ordinary Nigerians are feeling the pain of the economic downturn. In the same vein, respondents seized the opportunity of the poll to urge the CBN to regulate bank charges (31 percent) and/or compel banks to reduce transaction charges (28 percent); as well as those with extreme views that CBN should scrap bank charges (23 percent). These were some of the key findings from the Bank Charges Poll conducted by NOIPolls in the week commencing June 5th, 2017.

Brief Background

The Central Bank of Nigeria (CBN) in its 2017 Guide on Financial Charges stipulates that[2], if a new charge is to be introduced, financial institutions should get a prior written approval from the CBN and should be properly communicated to customers before such new charges are introduced and implemented; although, recent media reports revealed that some bank customers in Nigeria expressed concern on unauthorized and unfair charges on their account by their banks.[3]

Similarly, the Central Bank of Nigeria (CBN) recently reviewed the cashless policy and reintroduced charges on cash deposits and withdrawals[4]. However, a cross section of citizens have been lamenting the unfavourable nature of these charges; especially in the light of the current economic climate. The negative implication of the charges on struggling Small to Medium Enterprises (SMEs) have also been highlighted over time. Against this background, NOIPolls conducted a public opinion poll to gauge the perception of Nigerians regarding bank charges they have experienced in recent times.

Survey Findings

The poll was administered to only respondents who have bank accounts. The initial question sought to gauge the frequency of financial transactions carried out by respondents on bank accounts and 40 percent of the respondents revealed that they ‘sometimes’ carry out financial transactions via their accounts and the North-West zone had the highest representation (55 percent) in this category. Similarly, while 27 percent said that they ‘often’ carry out transactions on their accounts, 21 percent indicated that they ‘always’ carry out financial transactions on their accounts and those aged 18 – 35 years had the larger share (25 percent) in this regard. It is worth noting that respondents who had never carried out a transaction on their accounts had their interviews terminated at this point.

Of the proportion who has their accounts running, 72 percent indicated that they have noticed some classification of charges or deductions from their bank accounts and residents from the South-East zone accounted for the largest proportion (80 percent) of respondents who asserted to this. On the other hand, 28 percent said that they have not noticed any deductions on their accounts recently and residents from the North-Central zone have the highest representation in this category.

Subsequently, respondents who have noticed some sort of charges on their accounts were further probed to state the kinds of charges they have noticed. Almost half of the respondents (49 percent) mentioned ‘SMS charge’ which is a fee that banks impose on customers for the notifications sent on every activity on their accounts.

This is closely followed by 46 percent who stated that they are fully aware that ‘ATM / Debit Card maintenance’ fee is being deducted from their accounts periodically. Also, 38 percent mentioned the ‘65 Naira charge’ that banks charge its customers whenever the customer exceeds the allowed 3 minimum withdrawals from third party banks’ ATMs. Other mentions were ‘Interbank transaction charges’ (14 percent), ‘Monthly maintenance charges’ (9 percent), ‘Mobile banking charges’ (8 percent), among other mentions.

Nigerians were also asked to match the services rendered by banks, in relation to the charges levied on their accounts. Interestingly about 7 in 10 respondents (71 percent) were strongly of the opinion that the charges levied on their accounts by the banks were simply unfair. On the contrary, 29 percent opined that the charges are fair.

Furthermore, the poll revealed that the Central Bank of Nigeria (CBN) needs to do more in regulating bank charges as 76 percent of the Nigerians stated that the CBN has not done enough to protect customers by addressing the issue of incessant charges and deductions by commercial banks. However, on the other hand, 24 percent claimed that CBN has done enough in regulating bank charges.

Lastly, the opinions of Nigerians were sought regarding suggestions to address the issue bank charges. As anticipated, 31 percent of respondents stated that the CBN should regulate bank charges, while 28 percent noted that the CBN should compel banks to reduce their transaction charges. Curiously, there were some extreme views expressed by some respondents that the CBN should simply scrap some of the unnecessary charges amongst others.

In conclusion, this report has clearly shown the growing concerns by Nigerians over charges levied on their accounts by commercial banks in the country. This is evidenced by the 71 percent of respondents who consider the incessant bank charges as unfair in relation to the services provided by the banks. Also, 80 percent of Nigerians expressed displeasure that they are rarely notified before new charges are deducted off their accounts.

These findings highlight a critical need for the apex bank to step up its regulatory activities on the banks, as the general perception amongst the populace is that the CBN is not doing enough to protect customers from the commercial banks, especially in the light of the current economic recession.

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