Reps direct CBN to stop social media handles requirement from bank customers
…Urge banks to halt excess charges, illegal deduction
By Seun Ibiyemi
The House of Representatives has urged commercial banks in the country to stop excess charges and Illegal deductions from customers.
This is even as it directed the Central Bank of Nigeria (CBN) to stop its directive on addition of social media handles as part of ‘Know Your Customer’ (KYC) requirement for bank customers.
The resolution followed the adoption of a motion by Rep. Godwin Offiono (PDP-Cross River) at the plenary in Abuja on Tuesday.
In his motion, he said some banks and financial institutions in Nigeria indulge in the unethical practice of fleecing their customers through excess charges and unauthorised deductions.
He said customers of different commercial banks were groaning over excessive charges on their accounts, the financial institutions known as Deposit Money Banks (DMBs) had reportedly introduced different deductions.
This according to him was to increase their income, a development that is uncomfortable with customers;
“Apart from Stamp Duty, bank customers also pay Value Added Tax (VAT) charges applicable on all VATable transactions in their account.”
He said commercial banks were charging outrageous interest on loans, and overdraft at a rate that was higher than the agreed rate in the offer letter.
He said such arbitrary increase were done 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 such creation of charges not recognised in the Central Bank Guide to Bank charges was a common practice by Commercial Banks.
He raised concerned about the wrong application of maintenance fees, banks overcharging maintenance fees, the inclusion of transactions exempted from maintenance charge.
Others include: loan liquidation and bank-induced transactions among others.
He said affected customers attempted to lodge complaints to the Bank’s Customer Care but they were treated as beggars without result.
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.
The House also mandated the committee on Legislative Compliance when constituted to ensure implementation.
Also, the green chamber in the adoption of a motion by Rep. Kingsley Chinda (PDP-Rivers) and a few others at plenary in Abuja on Tuesday.
He said as laudable as the directive might appear, it would be unnecessary as it was likely to bear pressure on teeming Nigerian masses at this trying period.
He said the directive by the CBN was in conflict with the provision of Section 37 of the Constitution of the Federal Republic of Nigeria, 1999 on the right to privacy of citizens.
He said banks in the country already had the names, telephone numbers, passport photographs, emails, National Identification Number (NIN), Biometric Verification Number (BVN), utility bills and other basic requirements to identify, know and monitor customers.
He said there were better means of monitoring money laundering, terrorism financing, and proliferation financing, such as the Nigeria Police Force (NPF), Nigeria Financial Intelligence Unit (NFIU).
Others include: the Economic and Financial Crimes Commission (EFCC), intelligence and crime tracking agencies, amongst others.
He said if the directive took effect, Nigerians who were not on social media, with large turnovers from their businesses and trades, would be compelled to or systematically excluded from formal banking systems.
Chinda added that this would come with its attendant negative effects and implications.
He expressed worry about the untold hardships the directive would cause millions of Nigerians, especially the illiterates, or semi-literate business owners, traders and entrepreneurs living in the villages.
According to him, implementing the CBN’s directive at this point may clearly be unnecessary as it is likely to bear a lot pressure on teeming Nigerian masses.
Adopting the motion, the house stressed the need to revisit and halt the Central Bank of Nigeria directive to reduce the hardship and pain faced by Nigerians.
The house mandated the Committee on Banking and Currency (when constituted) to investigate the matter and report back within three weeks for further legislative action.
The house also mandated the committee on Legislative Compliance (when constituted) to ensure implementation.
