Banks earnings for the year 2016 may drop if the ‘no banking day’ protest being organised by consumer right groups – the Consumer Advocacy Foundation of Nigeria (CAFON) and the Coalition of Nigerian Consumer Protection Associations is carried out on March 1 as planned.
In protest against recent bank charges introduced by the Central Bank of Nigeria and Deposit Money Banks, the two organisation have fixed March 1 as “no banking day”, which implies that customers are to avoid all forms of banking services nationwide.
At a press briefing in Lagos, the organisations and some human rights activists urged consumers to avoid all forms of banking services nationwide for one day. The President and Founder, CAFON, Sola Salako; and Founder, Market Ombudsman, Dr. Ope Banwo, said the plan was to persuade bank customers to protest against the unbridled charges, which various banks are using to short changed them.
The move has been viewed by observers as something that would affect the bottom-line of the banks. The Banking Sector Outlook released recently by Businessday, estimated that total banks profit after tax in 2015 is N878.67billion while total assets hits N47.17trillion in 2015 alone.
The groups further decried the role of the CBN in constantly changing policies without notice instead of carrying out its responsibility of regulating the sector as well as protecting customers from exploitation, adding that under the current management of the central bank, abolished fees were being reintroduced.
According to them, the CBN appears to be more sympathetic to the banks to the detriment of the vulnerable customers in view of its recent policies on bank charges.
Salako called on the banking public not to visit the Automated Teller Machines or the banking halls that day. “For many years now, customers of banking services have endured excessive charges, unexplainable fees and unfair contracts that only protect the banks but do not protect the consumers.
“Banks debit customers’ accounts at will for charges we never agreed to or were not aware of; they charge us for everything; some banks are charging N210 for the use of deposit and transfer forms in their branches!”
She added that thousands of customers have been victims of ATM fraud because the banking industry failed in its duty of educating and informing consumers of the inherent dangers in online banking at commencement.
“These incessant multiple charges are even more prevalent on loan accounts, while many banks have also taken advantage of the CBN’s fluctuating forex policy to charge customers exchange rates that far exceed the CBN rates without even notifying the customers of the rates before the transactions,” Salako stated.
Salako said: “It appears that the banking sector is operating a price fixing cartel called the Bankers’ Committee superintended by the CBN where they determine how much to charge for what.
“When consumers challenge any questionable fee, the banks are quick to say it is as approved by the CBN. Whose interest should the CBN be protecting, the banks making profit or the consumers trying to make a living? How can consumers choose between banks when prices are already fixed by the regulator’s fiat?
Also speaking at the event, Banwo faulted the recently introduced maintenance fees for current accounts and ATM cards as well as the N50 Stamp Duty, maintaining that the flat levy of N50 for every transaction from N1, 000 was not equitable and amounted to taking from the poor to enrich the wealthy.
“A student who receives an allowance of N2, 000 pays the same amount as a rich man who receives a deposit of N10m! So, the student is technically paying more taxes than the rich man. That is inequitable and unfair,” Banwo added
According to Banwo, consumers of banking services have been subject to series of unsatisfactory services, transactions and contractual terms. To this end, he lamented that Nigerians have endured excessive charges, unexplainable fees and unfair contracts that only protect the banks but do not protect the consumers.
He said: “Banks debit consumers’ accounts at will for charges we never agreed to or were not aware of; they charge us for everything; we pay to get our statements; introduction letters; debit cards, and now, some banks are charging N210 for the use of deposit and transfer forms in their branches”.
Salako expressed her concern over the way customers have suddenly become victims of management and regulatory lapses resulting in many consumers losing their deposits in the banking crisis of the last two decades.
“Thousands of consumers have been victims of ATM fraud because the banking industry failed in its duty of care to educate and inform consumers of the inherent dangers in Online Banking at commencement. Some consumers are still unable to access their deposits due to botched BVN registrations because the banks did not take time to properly educate consumers on the process before implementation,” she stated.