Dale Sobowale
31 August 2008
column
WEEKS ago, I promised to search for the bankers tariff. The search was longer than I thought; it took me to Abuja.
Even a text message to CBN yielded no reply until I stumbled on the document by sheer determination. Its actual title is Guide To Bank Charges. And I was appalled at first glance. Now, we are beginning to understand why the banking sector is in a mess with respect to charges for services rendered.
I bought two copies at the Chartered Institute of Bankers of Nigeria, CIBN, bookshop at Victoria Island, Lagos. Among the most striking observations were the following. First, there was no acknowledgement as to which organisation issued it.
Was it the Central Bank of Nigeria or the CIBN or who exactly? It is amazing that such an important document regulating banking transactions should not carry the name of the issuing authority. Second, the Guide was, according to it "Effective, January 1, 2004".
That, as everybody knows, was before consolidation. I asked the store clerk if that was the latest and I was assured that it was. Again, that raises some questions among which are the following: Have there been no amendments to the guide since 2004?
If there are, why have they not been published for all the stakeholders to know what are the legitimate charges banks can make? The guide for obvious reasons, has no entry for ATM cards which have become not only pervasive but a bone of contention between customers and bankers and about to erupt into massive nationwide boycott of ATMs by customers.
The question is: shouldn't there be a guideline on what can be charged for the use of ATM facilities since banks have now made it mandatory for some transactions? We can now hand down the first indictment.
By any measure, the failure to update the guide is a dereliction of duty by the CBN and the CIBN. The guide is twelve and a half pages long, and it is inexplicable why it cannot be updated annually and made widely available to customers since the banks have it.
At the price of N125 per copy, many clients of banks, who have suffered major losses, will gladly procure one copy; some two or three to give to their accountants.
Now, we turn to the content of the GUIDE itself to find out what it stipulates. But first, let us examine some excerpts from the preamble which states: "The "Guide to Bank Charges" provides a standard for the application of charges on various types of services rendered to customers of banks.
This Guide has been drowned (sic?) up bearing in mind the need to ensure flexibility and competitiveness required to deliver superior service to customers in a deregulated Nigerian economy. It also serves to align Nigerian Banking practices with international best practices and global financial standards.
The Guide to Bank Charges shall be applicable to all classes of customers of banks including individuals, corporate, governments, (Federal, State, Local, and their parastatals), and non-governmental organisations. Whereas the Guide to Bank Charges provides for charges on various products and services, it is, however, not exhaustive."
On the face of it, there is nothing to quarrel with in the preamble. However, when we move to Section 1, we discover that the Guide to Bank Charges is totally useless to customers and only favours banks.
Let me set it out as it is presented in the guide.
Section 1 Interest on deposits Description Rates
1. Current Accounts in Credit Balance Negotiable
2. Savings and Deposit Accounts Negotiable
Negotiation takes place between at least two parties; everyone knows the bank as one party. The first question is: who is the other party? Is the Guide asking each depositor with a credit balance to negotiate separately with the bank?
Obviously, that makes no sense; the banks will do nothing else all day but sit and chat with thousands of people. The next question is: how often can this negotiation take place assuming we have settled the matter of who the other party is? Every single day? Every week? Every month? Annually? Or once in a life time?
Because the Guide is unknown and so thoroughly worthless to individual depositors; negotiations take place only between banks and giant organisations. Individuals are made victims of banks which cannot and do not negotiate with them. What individuals receive is not a negotiated interest rate, but, an ultimatum; take it or leave it. And even when leaving, the bank shakes them loose of some of their money.
They place their deposits and mostly get swindled. Indeed, if every individual depositor were to march to his bank determined to "negotiate," the banking system will collapse. There is a warning in that statement for banks. I hope none will dare me to use them to test it. And there is hope for customers too. We will soon get to that.
To be continued.....
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