A Total Of N5Billion Illegal Bank Charges Returned To Customers - CBN

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The Central Bank of Nigeria has said that it has recovered and returned to customers a total of N5bn wrongfully taken from depositors by banks operating in the country. It also said it would focus on the protection of consumers of products being brought to the market by banks over the next three years,.

The Deputy Governor, Financial Services, CBN, Dr. Kingsley Moghalu, told the Senate Committee on Banking, Insurance and other Financial Institutions on Tuesday, that there had been a crisis of confidence between banks and their customers regarding charges on deposits.

He said, “In the next few years, between now and 2015, we will be focusing on consumer protection. There are ranges of bank charges that are acceptable.

“As I speak to you, we have recovered from the banks N5bn as wrong charges, which have been returned to Nigerians.”

He said CBN was also focusing on data integrity from the banks, financial stability, disclosure, transparency, corporate governance and risk management. Moghalu said that although some stability had been achieved as a result of the reforms in the banking sector, CBN was taking measures to ensure that the gains of the reforms were not reversed. He justified a recent circular that put embargo on further lending to bank debtors, who owed about $5bn, saying there were indications that financial indiscipline was rearing its ugly head again.

“They will not be allowed to borrow until they start paying their debts. This is to ensure that the gains from the reforms were not reversed,” he said.

Moghalu also explained the economics of high interest rates, arguing that it was necessary to keep inflation at a stable rate, while sustaining the value of the naira.

According to him, the reforms are not a destination, but a process that will continue so as to save the country from the effects of the global financial crisis. The committee sought clarifications on the various intervention funds operated by the CBN, expressing concerns that the agriculture sector was receiving little of the funds, in spite of the fact that it was crucial to the national economy. Moghalu, however, explained that the intervention funds were meant to stimulate the economy and mop up excess liquidity.