Nigeria’s Dysfunctional Banks

 By Sonnie Ekwowusi

On a Thursday I went to one of the branches of a Bank to carry out a transaction on one of the accounts of our law firm. This particular account was opened about 17 years. And since the opening of the account, our law firm has been successfully operating without any hitches or hiccups. 

But this day after presenting my cheque at the counter, I was informed that “Sir, this account needs reactivation.” “Why the reactivation?” I queried. “Because it has been rendered dormant. It is no longer active,” the lady responded. What will I do to reactivate it? She pulled out a sheet of paper containing some bank requirements and said: “Sir, these are the requirements for reopening the account. 

We need two references from you, your means of identification. We also need your utility bills, signatures of signatories to the account, Special Control Unit Against Money Laundering (SCUML) Certificate.” I carefully explained to the lady that I was an old customer of the bank, and, that at the time of opening the account 17 years ago I satisfied all bank requirements for opening a corporate account, and that SCUML certificate wasn’t a requirement at the time I opened, and, in fact, does not apply to law firms.

However, the bank was unyielding, so I left the bank and returned to the bank with a copy of the Court of Appeal judgment in Central Bank of Nigeria V Nigeria Bar Association delivered on June 14 2017 wherein the court held, inter alia, that the Money Laundering Act 2011 (SCUML), in so far as it relates to legal practitioners, is repugnant to the Legal Practitioners Act and the Evidence Act, and, therefore not applicable to law firms. But the banker insisted I must produce a SCUML certificate failure for which our law firm account will remain closed. I then applied to permanently close the account and my application was granted.
 
Most Nigerian banks have a reputation for acting contrary to the law and interests of their customers. Truth to tell, at times I am tempted to buy the argument that most Nigerian banks are just dysfunctional. To begin with, the apex bank, the Central Bank of Nigeria (CBN) is working against the interest of many Nigerians respectfully Nigerian exporters and importers. The current CBN is a pawn in the chess of the Buhari government. The governing board of the CBN is not insulated from partisan politicking. In fact Emefiele’s CBN functions as if it is an appendage to the Presidency.

 President Buhari habitually directly issues instructions to the CBN Governor and the latter obeys without qualms. More than 2,000 manufacturing companies and would-be investors including Dunlop Plc have been forced to flee Nigeria owing to the CBN’s strangulating forex policy and monetary policies. The CBN obstructs food importation into the country even though it cannot tackle food scarcity in the country. For example, recently the 10 products selected by the CBN for special intervention to reduce food importation in the country fell short of the target contained in the bank’s five-year policy plan.

Under the pretext of charging their customers bank charges such as value added tax, or service charges or alert charges or charge on transfer (COT), new cheque book charges, overdraft charges, returned cheque charges or any other bogus charges, most commercial banks in Nigeria are quietly “stealing” depositors’ funds without the knowledge of the depositors. The annoying aspect is that these unsolicited prohibitive charges are arbitrarily and recklessly imposed on customers without prior consent of the customers.

Also the charges are discriminatorily imposed. For instance, a bank may exempt some wealthy customers with fat bank accounts from paying COT charges and turn around to impose heavy COT on other customers of the bank with lean bank accounts.  Besides, some bank statements are replete with calculation inaccuracies and errors. And considering many bank customers do not cross-check their bank statements or statements of account, such inaccuracies and errors are undetected. Fund transfers from abroad are also heavily charged. The last time I transferred some funds abroad my bank charged me an incredible percentage as transfer charges despite the fact that I maintained a domiciliary account with the bank. Not to mention the Automated Teller Machine (ATM) and the various e-payment bloated charges. Bank customers in Nigeria groan under the yoke of oppressive ATM charges.
 
From the foregoing it is obvious that the CBN and many commercial banks in Nigeria are in dire need of reinvention to guarantee their efficiency and ethical practices and professionalism. It beats the imagination that customers’ banks which ought to render customers the best bank services turn round to maltreat their customers as well as impose prohibitive bank charges on them. The tragedy is that Emefiele’s CBN which ought to exercise supervisory role over the commercial banks is in dire need of supervision at the moment. For sure, the accumulated rot at the CBN cannot be cleansed in one fell swoop: it requires constant cleansing possibly in the coming years until the whole rot is cleansed away.

Certainly we cannot continue to live in a country with dysfunctional CBN and commercial banks. That said, bank customers should learn to cross-check their statements of account to ascertain that they are not fraught with errors. We need enlightened bank citizenry that are keen on protecting their rights. In keeping with bank-customer good relationships, banks should treat their customers with respect, refinement and delicacy. According to the popular saying, customers are always right. A customer is never wrong.        

Therefore requesting that a bank customer should first and foremost procure a SCUML certificate before his account is reopened is punitive and disrespectful. I thought banks were supposed to make opening of bank accounts easier for their customers in order to encourage them to continue to patronize the banks. Definitely by making the procurement of a SCUML certificate mandatory many customers would be forced to shut down their bank accounts like I recently did.
 
Therefore in order to enhance smooth bank-customer relationship, the CBN should scrap the SCUML certificate requirement. First, getting a SCUML certificate from the EFCC is tedious. The process takes almost a month. So, needless to place this unnecessary SCUML burden on the shoulders of a bank customer who is simply patronizing the bank. If the EFCC and our security operatives are seriously out to track down and arrest money launderers or those involved in financial crimes, they know the best way of going about it. Certainly harassing an innocent bank customer over the non-possession of a SCUML certificate is improper.

Therefore the CBN, as I earlier said, should reinvent itself. First and foremost, it should regain its independence. It should serve the interest of all Nigerians not only the interest of the Presidency. Above all, it should perform its duties responsibly. In the coming months we look forward to seeing a revamped CBN capable of fulfilling its statutory duties diligently and responsibly no matter whose ox is gored. On their part, commercial banks should treat their customers with due respect and regard.

*Ekwowusi is a commentator on public issues