Reprieve seems to have come for bank customers as competition among the banks is driving down the cost of running accounts, ADEMOLA ALAWIYE writes.

Dr.  Thomas Abah is a long-standing customer of one of the Deposit Money Banks located on Oba Akran Avenue in Ikeja, Lagos. He had gone to the bank to make an emergency withdrawal on behalf of one his children, who urgently needed money at school.

By his calculation, his balanceshould be N61,000, and he needed just N60,000. As a current account holder, he felt he could withdraw the needed N60, 000. But to his chagrin, he was told he had only N52,000. His anger was fueled by the fact that he had barely withdrawn money three days before that day.

Angrily, he approached he Customer Service Officer, who told him that various charges (which also reflected in his statement of account), had eaten up N8,000 in three days.

Abah’s plight only serves to illustrate the experiences of various customers with banks in the land.

Though the reforms initiated by the Central Bank of Nigeria are meant to sanitise the banking industry, customers of DMBs appear distraught, virtually crying out against what they describe as poor bank services.

With increasing charges and other alleged illegal deductions made daily by these banks, the banking sector is gradually losing customers’ confidence and the place of pride occupied by the industry in the nation’s scheme of economic development.

The Bankers Committee of the CBN recently said it would investigate alleged excessive charges imposed on customers by banks.

The committee pointed out that the recent directives of the CBN were meant to streamline bank charges and make customers to enjoy banking services at a reduced cost.

The planned investigation is in reaction to series of complaints about excessive charges made by bank customers in the country.

The Group Managing Director, Diamond Bank Plc, Dr. Alex Otti, while addressing journalists shortly after the Bankers’ Committee’s meeting in company of the GMD, Citibank Nigeria Limited, Mr. Omar Hafeez; GMD, Union Bank of Nigeria Plc, Mr. Emeka Emuwa; Director, Banking Supervision Department, CBN, Mrs. Tokunbo Martins; said, “A decision was taken to remove the ATM charges; and as far as I know, banks have removed that. But it’s news to me when you say banks are now introducing new charges. We will confirm that.

“Even without a formal report, we will investigate it and every bank is supposed to actually comply and if there is any bank that has not complied, I don’t think it is acceptable to the Bankers’ Committee. So, we are going to look into it.

“What we are trying to do is to streamline bank charges so that you know the maximum amount you are charged. The only thing that can happen is that you can be charged less and not more. Since you brought it up, we will investigate it.”

Apart from the unanimous decision by the Bankers Committee to drive down banking cost to customers, our correspondent gathered that the individual banks were introducing new offers to reduce the cost of running bank accounts, a feat analysts said would bring out the best in the banks.

For instance, the recently licensed Heritage Bank Limited last week announced that it had introduced an offer to charge zero commission on turnover on current accounts.

Heritage Bank, which recently concluded its revalidation exercise, said in a notice to its customers, “Our legacy remains to be at the fore front of events. We had done it in the past by introducing Automated Teller Machine to the country. We are at it again and have achieved this feat by taking the lead once again.

“Effective Monday 15 April, 2013, Heritage Banking Company offers zero COT services. There shall be no hidden charges. This huge selling point will boost our deposit base and we must be ready to serve customers as they come in their numbers. Customers can also enjoy interest on their accounts within certain maintained balances.”

Speaking on the competition in the banking sector, the Chief Executive Officer, Heritage Bank, Mr. Ifie Sekibo, said, “Heritage Bank is expected to grow by 13 more branches by June 2013 from three branches it started with.

“We are targeting 16 branches by June and from there. We will grow further, although having many branches is not the ultimate because we are going to use technology to drive our business. There is mobile money, ATM and online banking transaction, all driven by technology.”

Analysts, who spoke with our correspondent, said competition would bring out the best in any sector.

The Deputy Manager, Civic Investment Limited, Mr. Thomas Adenuga, said, “Competition will bring out the best in the banks; so far, the competition is a healthy one. Don’t forget that competition was part of the factors that drove the banking sector into crisis a couple of years back. However, that was an unhealthy completion.

“The move by Heritage Bank to offer zero COT is a good one, especially coming from a newly licensed bank. I hope strong banks will take a queue from that.”

The Bankers’ Committee had in February agreed to reduce all bank charges in order to enhance financial inclusion.

As a first step, the committee endorsed the downward review of the COT charged current account holders from N5 on every N1,000 withdrawn to N3.

The approval of the reduction was announced after the committee’s meeting, which was held at the headquarters of the CBN on Tuesday in Abuja.

The Managing Director, Access Bank Plc, Mr. Aigboje Aig-Imoukhuede, said working with the CBN, the committee would soon unveil the guidelines for the review of other bank charges.

He said the reduction became imperative since many people now used banking services owing to the financial inclusion strategy of the CBN.

He said, “With financial inclusion, more and more people are using bank services and, therefore, more and more people are becoming used to the concept of bank charges and so on, which hitherto perhaps, did not use this service.

“So, working with the central bank, we are also going to come up with a new guide, but of course bank charges cannot stop, especially when you are providing value; but they will come down.

“One of them, for example, is that in 2013, we are going to move from N5 per mill to N3 per mill on Commission on Turnover, and gradually that will continue to reduce.”

Source: Punch