You may be one of the many banking customers who are victims of illegal bank charges.
Illegal bank charges are real and banks get away with them due to three reasons.
The first is that most victims are ignorant, they don’t even know the charges allowed for banks.
Some of the victims know but believe they can’t do anything about it.
The last set of victims are bank customers who know the bank is stealing their money but they feel the effort required compared to the amount involved is not worth it.
The first step to detecting illegal bank charges is to be familiar with the legal bank charges.
The second step is to develop the habit of reviewing your bank statement and notifications for alerts. By this you will know what the banks are charging you for whether it is legal or illegal.
Legal bank charges are those allowed by the Central Bank of Nigeria. They are contained in a document called Guide to Bank Charges.
Any bank charge not included in the document or in excess of the amount stimulated in the document is illegal.
Current Account Charges
The following are the basic charges allowed with respect to currency accounts.
1. Current Account Maintenance Fee (CAMF)
It is like the rent you pay for temporary use of someone’s property. In this case you are paying the bank for using the account to pay or for using the services of the bank to pay.
The amount allowed is N1 per N1,000 of money the customer pays to somebody (third party) out of his account (customer induced debit to third parties)
If you pay somebody N10,000. The CAMF is N10.
However the bank must also charge Value Added Tax (VAT) of 7.5% for the service rendered.
Hence in addition to the N10 in the example above, the bank will also debit you for 75 kobo. Note the VAT will be remitted to the government through the Federation Account.
2. Stamp Duty Charge
The government requires that banks charge/debit customers N50 for every third party deposit into their current account.
The directive to this effect is contained in a CBN circular dated January 15, 2016.
Stamp duty is limited to third party deposits above N1,000 into your current account either via electronic transfer, cash or cheque.
So if someone pays money (above N1,000) into your current account by any of the three methods listed above, the bank will charge you N50. Note that the money will be remitted to the government.
If you ask someone to help you deposit money into your current account, and the person uses his/her name as the depositor’s name in the teller, the bank will still charge you N50 for stamp duty. To avoid this, tell the person to use your name as the depositor’s name when completing the teller.
To be continued.
Questions relating to illegal bank charges should be dropped as a comment.
I am the Banking Spirit.