Banks killing ease of doing business for startups, charges N10,000 for confirming CAC cert
Even though the Vice President, Prof Yemi Osinbajo had on Tuesday urged the banking sector to support the country’s Economic Recovery Growth Plan (ERGP), a new survey report by Business Hilights has revealed how commercial banks bleed between N6,000 to N10,000 from newly registered companies wishing to open a current account.
Investigations across all the banks show that all of them collect the money from the very first initial deposit made by the prospective current account holder.
During the course of the survey, majority of the banking staff both top and junior failed to give credible reasons why banks collect money just to confirm registration documents from Corporate Affairs Commission (CAC).
Some of them even agreed that it was a fraud against new business because what is being searched is not missing.
They also agreed that what is being searched is just to confirm that the presented registration documents including members of Board of Directors and registration certificate are truly from CAC who gave out the registration number.
A top official of the CAC also confided in Business Hilights during the survey that banks pocket well over N100 billion from the act because CAC has an average of over 8,000 new companies registered on a yearly basis.
CAC also said “banks are not supposed to charge any money from prospective Current account customers to confirm the documents generated by the CAC because everything is online”.
“All a bank need to do is to log in the registration number of the new company seeking a current account in the bank and every needed information will flow seamlessly and this simple clicking should not cost anything on the side of the new bank customer.
Continuing, the official of CAC said “it will amounts to robbery, frustration of ease of doing business if commercial banks have the heart to charge a new customer almost what he spent in registering a company at CAC for just a click to confirm CAC documents before creating a current account for a customer with a new company.
“All you pay after due documentation for the registration of a new limited liability company is not up to N10,000. So why should a bank charge you almost what you spent to get registered at CAC to contact us at CAC for mere confirmation of the documents we signed for you. Its day light robbery and the CBN must stop banks from that abuse of privilege.
However, a top official of one the leading new generation bank (name with held) blamed the Central Bank of Nigeria (CBN) for the charges for search by commercial banks, saying “The charge for search or confirmation of directors of a company or other documents from CAC was approved by the CBN banking regulation and we cannot stop it and we have not been told to stop it”.
During the course of the survey, Business Hilights team ran into a new current account holder. The customer (name with held) said his bank collected about N6,000 for search at CAC, but none of his directors including himself was called by any staff of the bank for confirmation.
He added that the money was deducted from the initial N10,000 he paid for the opening of the current account for his new company.
From his experience and others, it means that commercial banks are clearly feeding fat on new businesses instead of assisting them to grow.
The report therefore advised the CBN to as a matter of urgency, criminalise charging new customers for the confirmation of their CAC documentation hence they are doing it online seamlessly and freely.
Vice President had at the 22nd World Conference of Banking Institutes (WCBI) hosted by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, called on bankers to make banking experience encouraging for new businesses and even old ones so as to grow the ease of doing business in Nigeria as soon as possible.
