Business Hilights

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CBn Emefiele

Nigerian Bank customers’ begin campaign for higher interest rate on deposits

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The recent revelations bordering on the bumper rip-off by banks on depositors seem to have spurred many depositors’ to begin to look at ways to seek redress.

This is based on the fact that since recently, banks in connivance with their regulators had been serially increasing charges and off-takes from depositors’ accounts whether after deposits or even withdrawal.

Only recently, several commercial banks in Nigeria reported surge in income from fees they charge customers for use of their various electronic banking services, principally, transaction alerts, Automatic Teller Machine (ATM) services and money transfers among others.

A report disclosed further that top 10 banks earned N138 billion as at end 2016, up by over 26 per cent from N109.1 billion in 2015. Total industry figure is expected to be over N160 billion and over 30 per cent year-on-year jump.

Already, organized labour had declared the e-transaction charges as not only outrageous, but also a corporate extortion, pleading with the Central Bank of Nigeria (CBN) and other regulatory agencies in the financial sector to intervene before it gets out of hand.

Banks continued to rip off customers with low interest rate negotiations on deposits, while widening the lending rates, a situation that reduced their respective costs of capital considerably.

The development, which boosted some of their latest financial statements, was regarded as favourable rates’ negotiations with depositors.

Analysts say the growing fees charged by the commercial banks are becoming a source of discouragement for the expected speed in the growth of financial inclusion.

The rise in ATM charges and surreptitious introduction of unexplainable tax regimes by banks discourage both existing customers and new ones in continuing with banking services.

A new report recently revealed that only charges from ATM, PoS and electronic transfers earned commercial banks in Nigeria over N130 billion.

Investigations by Business Hilights showed further that just as depositors earn peanuts- an average of 4.2 per cent and 8.51 per cent for savings and term deposits respectively, the same customers pay as high as 29.3 per cent for borrowing.

According to some depositors who spoke to our correspondents in Lagos, Abuja and Kano, they seek interest rate increase to about 20 per cent considering the height of interest on loans by banks.

Besides, the spread between the average savings deposit and maximum lending rates also widened by 0.27 percentage point to 24.86 percentage points at the end of February.

The one-month and 12-month maturity deposit rates fell from 8.58 per cent and 10.77 per cent in January 2017, to their respective levels of 8.24 per cent and 10.37 per cent, at end of February 2017.


Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.