BY GIDEON AZUKA

BANKS in any modern society have become so central to the operations of the economy on a day- to- day basis that it has become almost inconceivable how any society can operate without the vital services rendered by them. Almost everywhere, they play multifarious roles which include unifying and intermediary roles between the fund-supplying and fund-demanding sides of the society, executing savings and investment functions. Considering the requirements for protection of the rights and interests of depositors, establishment of stability and confidence in financial markets along with requirements for economic development, banks are expected to ethically pursue their operations in compliance with the principles of integrity, impartiality, reliability, transparency, social responsibility and controlling money laundering.

All that appear to have become history as contemporary studies and experiences reveal preponderance of unethical behaviours as being prevalent in the Nigerian banking system, forcing many to seek alternative ways of financial transactions.

Banks play multifarious roles which include acting as financial intermediary between the surplus economic units and the deficit spending ones. The banking industry plays a major intermediation role in an economy by mobilizing savings from surplus units and channeling the funds to the deficit units, in particular private enterprises, for the purpose of expanding their production capacities.

Consequently, for any bank to perform very well in its intermediation role, certain issues need to be duly addressed, especially in the areas of ethics and professionalism in a bid to retain public trust and confidence.

The importance of ethical behaviour in the financial sector cannot be over-emphasized as businesses’ survival depends as much as on reputation as on performance. Behaving in an ethical manner is part of the social responsibility of a business. Since the banking and finance industry plays a vital role in the economy of any nation, it is, therefore, expected that they will apply the highest level of ethical standards.

But this is far from being the case for now.

According to a 2018 Access to Financial Services Survey conducted by Enhancing Financial Innovation and Access (EFInA), 36.6 million adult Nigerians out of the 99.6 million (36.8 per cent) total adult population are financially excluded, with 44.1 per cent being male and 55.9 per cent female.

This is as a result of the overcharged levies and illegal deductions from the customers’ accounts, thereby making most people feel that their money is no longer secure with banks. This has led to many individuals withdrawing from saving their monies in banks; rather, they prefer to look for alternate means of saving, either at home or somewhere else.

It was also gathered that some banks unofficially deploy the money in deposit accounts to meet up loans demands for other people or businesses. In return, the banks receive interest payments on those loans from borrowers, even in the face of this, they keep deducting and overcharging depositors illegally and unduly, this is even after transacting with one’s money and gaining the interest from such transactions.

Some Nigerians have identified greed, corruption and instability of the financial sector as reasons why people now opt to keep money at home.

A financial analyst, Rotimi Agboluaje, bemoaned the trend, saying this had impacted negatively on the economy.

Mr. Agboluaje cited illiteracy, lack of financial education and lack of confidence in the banking sector as reasons many Nigerians keep money at home. He said that it would be difficult to manage the economy, especially the liquidity in the system, if the amount in circulation was not known.

The analyst advocated public enlightenment, financial inclusiveness and strict enforcement of the extant laws.

Mr. Samuel Anazodu, said many keep money in their homes to ensure easy access while avoiding the stress of banking operations.

Oluwatoyin Sanni, identified corruption and ignorance as major reasons why Nigerians keep money at home. He went further to identify the two categories of people who keep money at home, “there are two categories of people in Nigeria who keep money at home, prominent Nigerians who do not want to be caught and the uninformed people who may not understand the banking system out of ignorance. Now, another group consisting of those who are wary of the sharp practices by staffs of the banking sector is emerging’’ he said.

An Abeokuta-based economist, Sunday Adelani, said Nigerians keep money at home to avoid what they describe as “unnecessary and high charges not clear to them on their accounts’’.

Mr. Adelani added that many keep money at home because they were not properly motivated and informed.

He urged banks to reward customers who have been loyal and consistent in their saving habits with higher interest rates and also reduce bank charges on depositors’ accounts.

Mrs. Ezekude Patricia works with Axa-Mansard Insurance PLC, she spoke to us saying that most people do not understand the banking system, the system requires some certain amount to be deducted for the maintenance of your savings. “People work in the banks and not ghosts, they need to be paid, they work to make sure that your money is safe and you should pay them for that. Maintenance fee is always deducted for your card, even SMS alerts. What you have to do is to understand the system of every financial organization. Here in this PLC, if you make payment for your car insurance for one year, and within that year, your car didn’t develop major fault or get stolen or Burnt, you still have to renew the payment upper year, that’s the system, you won’t say because nothing happened to your car, therefore you aren’t paying for next year, no, it is not done”

She added that people should always go through the terms and conditions of the bank he/she wants to transact with and ask questions for clarification.

She also added that one should report any case of overcharged or illegal deductions, “aside the necessary deductions which is normal, report any other deductions that you think is illegal to the bank for sorting or to the CBN” she concluded.

Some bank customers have decried the inability of their banks to make cash available for them on the Automated Teller Machines (ATMs) and even online transfers when needed. They lamented over keeping their money in the bank, and taking it would then become problematic.

Mrs. Ashiedu Helen, who spoke to us saying that a greater part of her money is never in the bank but at home. She said she seized saving in the bank after she nearly lost a nephew due to the problems encountered during her withdrawal of funds. “On hearing the news of my sick nephew and the need for urgent deposit of some huge amount of money, I quickly rushed to the bank and met a long queue, I tried withdrawing from the ATM but it wasn’t dispensing cash, I went back inside the bank and explained the urgency of my need to them but I was told to go join the long queue. I tried the next bank to them but their ATM machines were out of service. I thought of what to do, and I couldn’t transfer at that moment, so I rushed down to the hospital and luckily for me, they accepted my card for payment and it went through. That was how they commenced the treatment”, she narrated.

This issue of non availability of funds has, however, been attributed to operational problems rather than liquidity issues as some analysts believe that if such persists, the financial inclusion drive of the central bank would be at risk.

That many banks short-change their customers and make illegal profit from them is an open secret and shame of Nigeria’s banking sector. The Central Bank of Nigeria (CBN), therefore, told Nigerians what they had always endured when it said some time ago, that banks imposed excess, illegal and unauthorised charges on their customers. It is, of course, a regime of cheating that must be stopped.

In 2015 alone, CBN investigated ‘over 6000 complaints from banks’ customers and compelled banks ‘to refund the sum of over N6.2 billion to affected customers’. The apex bank however, failed to state the total amount claimed by customers, whether or not the affected customers were satisfied or not with the amount refunded and whether the culprit banks were sanctioned. Such information would have assisted in appreciating the convergence or divergence of what was claimed and what was refunded; the feelings of the claimant customers about the final outcome of their complaints, and CBN’s ‘resolve’ to continuously enforce the provisions of the Revised Guide to Bank Charges.

Of course, there have been many complaints by customers of banks about unauthorized and illegal charges. Such fleecing of the customers has become the rule rather than the exception. The excesses come under different descriptions such as management fees, processing fees, interest charges, commission on turnover, card maintenance fees, account maintenance fees, deposit, withdrawal and transfer telephone alert fees and ATM fees. Even the recently introduced stamp duty charge has become another source through which they have commenced overcharging their customers. In one transaction, some banks send more than two text message alerts and charge for each.

The banks, for reasons, such as greed, moral and professional bankruptcy, have often chosen to be the proverbial dogs eating the meat kept in their care. This has of necessity built distrust in the banks and their operations. This has had adverse implications for CBN’s programme of financial inclusion as well as the volume of money outside the banking system and effectiveness of monetary policy implementation.

CBN should, however, know that not everyone who has been fleeced by banks has complained or even has the capacity to complain to it. It is likely that those who complained are an insignificant number of those that have suffered in silence in the hands of banks. There might have been customers whose accounts witnessed a high volume of transactions and excessively imposed huge amounts of charges. Customers who are charged monthly amounts in the range of N40-N200 are unlikely to have complained. Yet being in the majority, given over 60 million bank customers in the system, the banks may have fleeced customers substantially. Equity and good practice demand that banks should either voluntarily refund what they have illegally taken from their customers or should be compelled to do so, whether affected customers have complained or not. If banks choose to wait until compelled, the CBN should, aside from the refund, impose deterrent sanctions against them. It is high time those who debase the noble banking profession and sabotage efforts aimed at financial inclusion were brought to book so that appropriate lessons may be taught.

It is equally important to emphasize the need for regulators in the banking and financial system to initiate enduring public awareness programmes that will build financial knowledge and literacy of consumers. For all that the CBN may believe, a large percentage of the banking public may be unaware of the Revised Guide to Bank Charges which specifies allowable charges for all banking services. Even if they know, its application may be a challenge for many. Such awareness programmes will enable the consumers to know when their banks are not being forthright with them and the steps they may take to protect themselves.

It is imperative to observe that the Consumer Protection Council (CPC), the government organ set up to protect consumers, seems not to have focused on the banking industry where consumers are daily crying out in anguish. It should wake up to its responsibilities or the quality and capacity of its leadership should be subjected to re-evaluation.

However, the responsibility of ensuring that CPC fulfils the expectations of the citizenry and works according to the law rests on the Ministry of Commerce and Industry. The time is ripe for the minister to take interest in the performance of the council in order to save innocent consumers of banking services from the excess-fee-charging banks.

While excess, illegal and unauthorised charges by banks should be seen as part of regulatory failure on one hand and impunity on another, it should also be classified as a serious financial crime by banks against their customers. This should not be allowed to continue. Banks should view with seriousness cases of their staff who are used by criminal elements to inject fake currencies into customers’ withdrawals and the increasing cases of customers being shortchanged with lower denominations being slipped into the midst of higher denominations. These are sharp and unethical practices that should not be allowed to continue because if the banks are no longer safe for our money, where else will be?

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