Experts Give Updates on Ways Nigerians Can Avoid Paying Excessive Charges in GTB, UBA, Other Banks
- The high fees for simple banking services like transfers, withdrawals, and account maintenance have remained a source of frustration for Nigerians
- Despite countless demonstrations, grievances, and even jokes on social media, nothing has changed; instead, more charges have emerged.
- Some financial experts have suggested different hacks that Nigerians can use in avoiding these excessive charges
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
Nigerians are already struggling financially, and the exorbitant fees for simple banking services like withdrawals, transfers, and account management have only made matters worse.
The situation has not altered despite numerous protests, complaints, and even social media memes; instead, new accusations have surfaced.
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Different bank charges in Nigeria
Value Added Tax, foreign exchange commission, ATM transfer fees, commission on turnover, POS transfer fees, interbank transfer fees, card maintenance fees, USSD charges, card issuance fees, check issuance fees, stamp duty, and transfer fees are just a few of the fees that existing banks charge.
Eleven banks earned nearly N714 billion in electronic fees and other commissions during the first nine months of 2022, according to a financial report.
This has nothing to do with whether a consumer is high-end or low-end. All transaction strata are covered by the policies.
Considering all of this, as well as the new fees brought about by digital banking, some Nigerians are worried about the banks' exorbitant fees.
For instance, since the government recently implemented a policy requiring a N50 penalty on electronic transfers over N10,000, Mr John Banji, a wholesale grocer in Abulelegba, Lagos, has ceased taking transfers from clients purchasing items costing more than N10,000.
“The N50 deduction eats into my profit margin, and I’m already operating on a thin margin by losing N50 on such transactions. My kind of market relies on high-volume sales to make a profit. Hence, I’ve resorted to accepting cash payments for large transactions, except if a customer chooses to incur the cost,” he added.
Businesses dealing in cash
To conduct everyday transactions without incurring transaction costs, some small business owners have also gone back to dealing in cash or keeping cash on hand.
Prof. Chiwuike Uba, a financial analyst, emphasised the wider ramifications of these fees, pointing out that Nigeria is already one of the nations in Sub-Saharan Africa with the highest bank fees.
“The charges not only serve as a disincentive to savings but also heighten the economic challenges faced by Nigerians,” he worried.
He noted that as of September 2024, a startling 93.1% of the total cash in circulation was outside the banking system, up from 87.5% the year before and reaching 94.3% in October 2024, according to figures from the Central Bank of Nigeria (CBN).
“This trend underscores a significant barrier to financial inclusion”, he asserted.
How to dodge excessive costs
Rather than relying solely on cash, Uba and other financial professionals who spoke to ThisDay recommended ways for people to dodge these costs.
Uba said bank customers should start considering transaction consolidation in order to save on fees. They should also regularly check their accounts for any unauthorised payments.
According to the financial analyst, bargaining with banks and taking advantage of opportunities for waived or reduced fees are also crucial.
Empyrean Professional Services' managing partner, Bamgboye Emmanuel, emphasised the importance of opening a proper and strategic account to save needless expenses.
“Grab an understanding of different banks accounts and their offers, then opt for low-fee accounts. It’s high time individuals started rethinking their banking habit,” he maintained
Additionally, Emmanuel recommended dividing large transactions into smaller sums when lump sum deals are subject to fees.
“Instead of transferring N10,000 or more that attracts a fee, why not transfer N9,500 or less to avoid the fee? Additionally, using cards for transactions is also economical,” he said.
Dr. Uju Ogubunka, president of the Bank Customers Association of Nigeria (BCAN), offered advice on how to prioritise necessary transactions and reduce the number of transactions.
“While it may be difficult to avoid all charges, consumers need to carefully evaluate the necessity of each transaction and look for opportunities to save, such as reducing transaction amounts where possible,” he added.
According to Jamiu Amusa, managing director of 171 Bureau De Change Limited (BDC), who constantly informs bank customers about high-volume transactions, it is essential to comprehend bank policies in order to customise them to meet particular demands. Amusa stated that certain banks have ledger balance accounts that have balance restrictions.
He clarified that customers on these accounts avoid fees by staying within the restriction, but that going beyond the agreed-upon limit could result in fees for all account transactions. He added that certain banks have products that give clients with large balances incentives.
“So instead of them even taking charges, they will rather credit customers,” he said.
He enjoined bank users to engage in open communication with banks by constantly seeking advice on what they want.
“By understanding bank policies, negotiating with banks, and exploring alternative banking options, businesses can navigate the complexities of bank charges and minimise their impact on profitability”, he advised.
How customers of banks can treat illegal charges
Legit.ng reported that customers wre asked to report any illegal charges on any transaction by the Central Bank of Nigeria (CBN).
In response to complaints about arbitrary bank charges, Mohammed Muazu, Head of Complaint Management Division, Consumer Protection Department, CBN, advised customers to review the CBN's handbook on bank charges to determine how much they should be charged for any given transaction.
Muazu suggested that customers compare the charges they were receiving with the parameters set forth by the CBN by carefully reviewing the online bank statements that were issued to them by their banks.
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Source: Legit.ng
