15 Aug 2008 |
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Seán Akinrele Recently, one of my banks forced its customers to patronise ATMs by cancelling across-counter withdrawals below a certain amount. Curiously, it also introduced charges ( I sought online information from Wikipedia and other internet sites on that mainstay of Nigerian Banks: Commission on Turnover (COT) but to no avail. It was not easily found in the list of accepted bank charges. In fact, I only found information on it with respects to Nigerian Banks. Nigeria appears to be the only jurisdiction where a customer pays his bank for the privilege of keeping and trading with his funds rather than receiving interest thereon. A friend applied for a naira credit card advertised by another bank last year. The advertised interest was 6%. Upon enquiry, bank officials orally said it was per annum; signed documentations were silent on this aspect. Upon drawing on the credit, he discovered that he was being charged 6% flat (i.e., a compounded monthly interest) which translated to over 76% p.a. Insider sources reveal that over 12, 000 defaulters have been recorded by the bank on this service. His every attempt to correct this anomaly was rebuffed by the bank. On one occasion, a female bank manager told him with insufferable arrogance that the terms were irreversible and he should ‘take it or lump it’. My friend has decided to ‘lump it’ by calling the bank’s bluff. Another client pledged various quoted shares worth several millions as collateral for an overdraft facility for his import business. He subsequently instructed his bank to sell his shares in a particular company to take advantage of a rise in its prices prior to the closure of its register. The proceeds were to be held by the bank as further cash backed collateral for the facility. The proceeds would have actually enabled him to liquidate the facility, with sufficient remaining to repurchase the shares some months later when he anticipated a drop in the shares’ value. Unfortunately, the bank failed to carry out these instructions, having lost the shares. He was not informed of this until after three months. To add insult to injury, the bank sought to unilaterally roll over the facility and added several new nomenclatures of charges to enable them extract as much from the situation as possible whilst looking for the missing certificates. These support submissions by Adeyemo Olukoya, a Forensic Accountant that Nigerian Banks practice fraud and shady practices against their public/private customers. Banks charge several dubious and excessive fees on customers. The regulatory authorities apparently condone/connive with our bankers to fleece the banking public. Banks reportedly prepare different audited reports for CBN, NDIC, FIRS and State Revenue Services1. I heard of these cooked books over 15 years ago. How come the regulatory agencies have been unable to put a stop to these alleged malpractices till date? According to a report:
The notorious practice of ‘deposit chasing’ by these banks is another area of concern. It has exposed their marketing officers (male and female) to compromising situations all in an effort to meet unreasonable deposit targets imposed on them. Recently, a young lady was in my office to encourage me to revive my account with her bank. I had let it go dormant because of their poor services. She introduced herself as my new account officer. After listening to her, I asked her if it was her habit to go to offices unaccompanied. She smiled and replied in the affirmative. ‘Assuming, I make a pass at you now and lock my office door to ensure I have my ‘way’ nko?’ I asked. She looked quite alarmed and I quickly assured I was kidding. I however drove home the folly of seeking deposits so naively and advised she team up with a colleague for these trips. Thankfully, she took to my advice as I often saw her with a female colleague around Ikeja thereafter. My discussions with banker colleagues showed that the banks’ are aware of what some of these girls do or go through to secure deposits. They just couldn’t care less. Some reportedly even organise ‘prayers’ for successful deposit drives by their staff: how curious? I often wonder, as I hear news of Nigerian banks opening branches in the West, how these over-bloated banks operate in such societies. Many of these shady dealings go on with the active connivance of Central Bank officials who often turn a ‘blind eye’ on their illegal deals for clearly pecuniary considerations. According to recent reports,
However, CBN has parroted such threats before. It has become like the bark of a toothless Bulldog. Bank officials often dare angry customers to report to CBN. They know CBN would at best only refer complaints to the Bankers’ Committee; which is composed of senior officials of the same banks in breach of a cardinal principle of natural justice: nemo judex in causa sua (no man shall be a judge in his own cause). Nigerian Banks have with the consent of the CBN and other regulatory authorities perfected a situation for their customers where heads or tails, the customer loses and the banks smile to their over-bloated vaults. For many customers in dealings with their banks: the more you look, the less you see. Seán Akinrele is a Solicitor and Advocate of the Supreme Court of Nigeria; http://www.akinrelegroup.com
1 Op ct: Adeyemo Olukoya, Nigerian Banks Of Fraud, by Seun Adesida (The Sun); http://www.huhuonline.com/news188.htm 2Op ct: Adeyemo Olukoya, Nigerian Banks Of Fraud, by Seun Adesida (The Sun); Reported at http://www.huhuonline.com/news188.htm 3Sanctioning Fraudulent Banks, The Source Magazine, 11th August 2008; http://www.thesourceng.com/fraudulentbankaugust11.htm
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