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Customers Bleed Under Burden of Charges as Banks Post N933Bn Profit

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12 commercial banks had jointly pulled in N933.16 billion in profits and made N216.52 billion from charges on electronic transactions, as customers continue to complain of excessive fees that they are being charged in 2020, despite the pandemic and the downturn in economic activities.

Customers Bleed Under Burden of Charges as Banks Post N933Bn Profit

According to Leadership, the banks are FBN Holdings, Access Bank, United Bank for Africa, Wema Bank, Sterling Bank, Zenith Bank, Guaranty Trust Bank, Stanbic IBTC, Ecobank, Fidelity Bank, Union Bank and FCMB had also seen an increase of 2.3 per cent in the revenue from fees and commission last year.

In total, they made N825.23 billion last year from fees and commission compared to N806.87 billion made in 2019 and to bank customers.

Fee and commission income of banks include account servicing fees, investment management and other fiduciary activity fees, sales commission, placement fees and syndication fees, revenue from electronic banking transactions, card maintenance fees and others are recognised as the related services are performed.

For many bank customers who spoke with Leadership about stamp duty charges, account maintenance charges, card charges as well as SMS alert charges which are the most complained about.

Many of them were of the view that the charges ought to be reviewed downwards further.

Whilst some were of the view that though some banks charge them unnecessarily, the charges are still reasonable.

The general consensus was however against the stamp duty charge, as all those whose opinion were sampled said there is no reasonable excuse for it other than to generate money for the government.

Aisha Ahmad, deputy governor, Financial System Stability, CBN, had mentioned that efforts are being put in place to lower the cost of deploying services by banks through many services initiatives.

According to her, a cut in bank charges had been one of the factors being canvassed for the country to be able to achieve its financial inclusion goals of the country as the CBN plans to achieve a financial inclusion target of 95 per cent by 2024.

In December 2019, the Central Bank of Nigeria had issued a revised guide on bank charges which became effective on January 1, 2020.

The guide had made some major cuts in fees that banks charge customers, one of such is the reduction in electronic transactions.

According to the guide, electronic transfers of N5,000 and below will have a N10 transactions cost plus VAT and transfers of above N5000 but below N50,000 now attract N25 charges plus VAT, while transfers above N50,000 attracts N50 charge plus VAT.

The charges on electronic transfers had been cut from N50 which most banks were charging.

As against the N65 previously charged by banks after third withdrawals on remote- on-us ATM transactions, the CBN had insisted that bank do not charge above N35 per withdrawal.

However customers complain that they are still charged N65 and some banks make the charge on every remote-on-us withdrawal, irrespective of if it is the first or second in the month.

Also, maintenance charges on cards was cut from N600 spread through the year to N200, a N400 shave off from what card holders would have to pay banks on an annually.

Also maintenance charge for foreign currency card holders was also cut down to $10 or its equivalent from the previous charge of $20 yearly.

Other major changes in the charges include removal of Card Maintenance Fee (CAMF) on all cards linked to current accounts.

Other reductions include Advance Payment Guarantee (APG) which was pegged at maximum of one per cent of the APG value in the first year and 0.5 per cent for subsequent years on contingent liabilities.

The guideline also stipulates an interest rate minimum of 30 per cent of monetary Policy Rate (MPR), the latest guide also stipulated that a one-off charge of N1,000 be applied to the issuance of cards, irrespective of card type (regular or premium) compared to N2,000 that was being charged by some banks. The same one-off charge of N1,000 applies for the replacement of debit cards at the customer’s instance for lost or damaged cards.

According to the guide, there will be no more charges for reactivation or closure of accounts such as savings, current and domiciliary accounts while status enquiry at the request of the customer (like confirmation letter, letter of non-indebtedness and reference letter) will now attract a fee of N500 per request.

On Current Account Maintenance Fee (CAMF), the Guide expressly stated that this would be applicable only to current accounts in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. It emphasized that CAMF is not applicable to Savings Accounts.

As the 2019 Finance Bill became effective in February 2020, banks were required to deduct N50 stamp duty due on every transaction, from customers account.

The Bill which took effect in February last year stipulates that the N50 stamp duty charge would be levied on electronic payments above N10,000 as against payment above N1,000 which had previously been proposed.

The stamp duty charge is deducted on every transaction that is N10,000 and above irrespective of the account type, savings or current and then remitted to the Treasury Single Account resident with the CBN.

The N50 charge had been the source of squabble between the Federal Inland Revenue service and the Nigeria Postal Service last year.

Many banks had immediately begun deducting N50 stamp duty from all transactions above N10,000 made from bank accounts including savings, current and corporate accounts in the country in compliance with the 2020 Finance Bill.

In April last year, customers of Access Bank had attacked the bank on social media after it compiled and deducted three months’ worth of stamp duty charge at once.

After trending for more than four days on most social media platform the bank had tried restoring its image by offering to refund customers and pick up the stamp duty fees.

A female nurse, Uche Pius speaking with Leadership said “I don’t understand the bank charges, at times if you decide to transfer money on your mobile phone the bank charges suppose to be N10 but you will be seeing N100 as bank charges and there is no alert that the money was removed or anything.

“I think the bank charges need to be looked into. It is like there is nobody regulating it, they (the banks) just remove charges because they know nobody is going to the bank to complain about N50 or N20 it will just look ridiculous do they just keep doing it over time and nobody talks about it. It needs to be regulated and there should be an alert for it. It needs to be regulated.”

For Obinna Ani, a software engineer, his grouse is with the withdrawal charges as well as card and account maintenance charge.

According to him, banks charge more than they are supposed to and complaining does not do anything to rectify it.

“They said after eight withdrawals N65 will be deducted but at the end of the month instead of seeing N65 you will be seeing N300 or more than that as bank charges or liquidation and it can be deducted like three times in a month, at times even without using the ATM they still deduct money calling it maintenance or liquidation fee and it happens every month.

“I had to withdrawal all my money in that account. Unlike what we were told growing up that money in savings account appreciate, these days, money kept in savings account depreciate. A friend of mine who had like N100,000 in his account before he left the country came back four years later to meet an empty account. They were just deducting charges on an account that was not even in use.

A writer, Ngozi Stanley-Obi whilst noting that banks are businesses and need to make profit opined that some of the charges are unnecessary. Ifeanyi Chukwu, a videographer and editor, said on a monthly basis, his bank account take a hit from several charges.

“I have a savings and a current account. Charges on the savings are OK, but the charges on the current account are too much. With the volume of transactions I do, I get charged not less than N10,000 monthly. The charges are mostly stamp duty charges, which is from the government and SMS alert.”


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E-Financial

Unity Bank Customers Win Over N4 Million in Cashtoken Rewards Promo

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Unity Bank customers have claimed over N4 million in cash rewards in its ongoing loyalty programme recently rolled out with Cashtoken, a Cash Reward-as-a-Service company.

The winners included no fewer than 40 customers who adopted and transacted on the Bank’s digital banking platforms, including the UniFi mobile banking application, the *7799# USSD platform or activated their Unity Bank Verve Card to transact on e-payment terminals across Nigeria.

Beginning from onboarding in our customer lifecycle journey, the Unity Bank Cashtoken Partnership commenced as a loyalty and reward scheme to reinforce the benefits of e-banking platforms.

To begin, Customer transactions earn cash tokens, which are then redeemed to qualify for the monthly Cashtoken Rewards draw. Consequently, winners emerge from the draws to claim the cash prizes.

Recall that the retail lender announced the ongoing Cashtoken Rewards loyalty programme in December 2023 in partnership with Cashtoken Rewards Africa to empower customers and improve customer satisfaction.

The partnership with Cashtoken Rewards also provided an opportunity for the Bank to migrate customers—old and new—to a platform that will continually create exciting rewards and appreciation for loyalty.

Eghomware Iyamu, Unity Bank’s Head of E-Business, commenting on the success of the Cashtoken Rewards loyalty program, stated: “We are excited to see our customers win over N4 million in cash rewards through our partnership with Cashtoken.

“This initiative demonstrates our commitment to recognizing and rewarding the loyalty of our customers”.

“By leveraging our digital banking platforms, including the Unifi mobile banking application and the *7799# USSD platform, we are not only enhancing customer experience but also providing life-changing opportunities.

“The Cashtoken Rewards program is a testament to our dedication to improving customer satisfaction and creating meaningful rewards along our customer lifecycle journey.

“We look forward to seeing more of our customers benefit from this exciting program as we continue to innovate and deliver exceptional value to them.”

Unity Bank has robust electronic banking products which include mobile and digital banking channels, including ATM, PoS, or any digital payment channels which support retail product transactions across the country. New-to-Bank customers are invited to open a Unity Bank account, onboard onto the digital platforms and begin transacting on the various platforms to earn cash token rewards and cash prizes while existing customers are encouraged to onboard and transact to win even more rewards and cash prizes.


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E-Financial

FXTM Academy Concludes Successful Event in PHC, Host Next Event in Lagos

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FXTM, a global online trading company is hosting an exclusive training for traders where participants can discover the strategies used by the world’s top traders to gain mastery of the market.

L-R: Oluwafumbi Ogedengbe, Specialist Client Education, FXTM Nigeria; Adaeze Uzochukwu, Education Coordinator, FXTM Nigeria; Mathew Anthony, Manager, Market Analysis, FXTM Nigeria; Destiny Ikeakanam, Education Coordinator, FXTM Nigeria and Pius Ogbu, Specialist, Client Education, FXTM Nigeria.

FXTM Academy is dedicated to helping traders and trainees achieve exceptional results in the global markets.

According to Mathew Anthony, Educator at FXTM Academy “We are a global online trading platform that offers stocks, commodities, and other financial instruments, providing traders with access to various markets, competitive pricing, and advanced trading tools.

“Our goal is to empower traders to Learn, Trade and Earn from the global markets.”

This Academy will provide free tutorials through webinars, workshops, video presentations, online courses, market analysis, insights, professional mentorship, and support.

“By offering education and training, FXTM Academy aims to help traders improve their trading skills, make informed trade decisions, and achieve their financial goals.”

Abiola Akinyele, Executive Director of FXTM Nigeria said the registration of the training has opened on the FXTM website and event will take place on the 17th of August.

He said it will be quite exciting and will provide great opportunities for participants to grow the skills to unprecedented heights and to join the ranks of the elite.


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E-Financial

Nova Bank Will Make Great Impact – Oduoza

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Phillips Oduoza, chairman of Nova Bank Plc, has said that the new commercial bank is poised to create jobs and make a great impact.

Nova Bank Will Make Great Impact – Oduoza

Oduoza who spoke at the launching of Nova Bank’s first branch as a national commercial bank in Lagos, said that the bank’s foray into commercial banking and upgrade to National Banking Licence were part of a long-term goal to make an impact.

He said, “We are not here just to maximise profit, but we are here as Nova to have the greatest impact in the society. And this is one of the reasons why we decided to extend to commercial banking business.

“We have been very, very successful, as testified by our customers in the wholesale banking space. And we felt it is just necessary to extend the service to the retail end of the market, which is where you will have the largest population of banking customers.

“Therefore, we want to transfer that success story to the retail end of the market. We want to impact the Nigerian economy as a whole. We want to assist in job creation, stability of the country, which Mr President has been working on. So, by going commercial, it gives us a platform for more job creation in the country.”

Governor Babajide Sanwo-Olu, who performed the ribbon cutting for the inauguration of the first branch, commended the board and management of Nova Bank for taking the decision to invest more into commercial banking not minding the various challenges and uncertainties in the economy.

He said, “We need to encourage them; we need to stay in touch with them because they have a choice.

“They could as well have remained as a nimble wholesale bank or as a merchant bank as a matter. But they felt they need to take it further, and this means they need to dip their hands into their pockets and bring additional resources that would make it possible for them to be able to compete on a larger scale.”

 

 


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