Banks face probe over “illegal” deductions from Nigerians

Nigeria’s House of Representatives has opened a probe into commercial banks over accusations that they are making illegal and unexplained deductions from customers’ accounts, summoning bank chief executives to appear in person before an investigative panel.

Nigerians have long complained about deductions made by banks on their accounts, often without satisfactory explanation and transparency. They range from text message charges, stamp duty, transfer fees, tax and more.

At a hearing in Abuja on Tuesday, the chairman of the House ad hoc committee, Kelechi Nwogu, accused banks of systematically deducting charges that are neither transparent nor properly remitted.

“Commercial banks are perpetrating illegality by deducting inexplicable charges from civil servants, public servants and other customers’ bank accounts without remittances,” Mr Nwogu said.

The committee is investigating deductions linked to taxes on civil and public servants’ earnings, as well as a range of bank charges imposed on customers. These include SMS alert fees, account maintenance charges and transfer fees, which lawmakers say have raised serious concerns about legality and accountability.

Mr Nwogu said the panel’s mandate was to ensure that all charges imposed by banks are lawful, accurately calculated and properly applied.

“Our mandate is clear. All deductions or charges must be deducted rightly, fined rightly, and used rightly,” he said.

In a stern warning to the banking industry, the committee rejected attempts by some lenders to send representatives instead of their chief executives. Mr Nwogu insisted that the CEOs of major banks, including GTBank, Zenith Bank and Access Bank, must appear personally.

“You cannot appear here without an identity. We are not here on our own. We are here on the mandate of the people who elected us into parliament,” he said.

The committee has given banks a four-day ultimatum to submit all documents relevant to the investigation. Any bank that fails to comply by the Monday deadline will face sanctions, Mr Nwogu said.

“We have resolved to meet next week Wednesday. You must submit all requested documents on or before Monday. We will go through all the documents, and we will put you on oath,” he added.

Lawmakers said the probe would be conducted in collaboration with the Ministry of Finance, the Office of the Accountant-General of the Federation and the Economic and Financial Crimes Commission (EFCC).

Public frustration with banking charges has grown alongside Nigeria’s cost-of-living crisis. A recent Business Expectations Survey by the Central Bank of Nigeria found that excessive bank charges ranked among the top constraints facing businesses nationwide, alongside multiple taxation and poor infrastructure.

In the survey, 70.8 index points each were recorded for high bank charges and multiple taxes, underlining how deeply the issue cuts across households and businesses alike.

The House committee said it was determined to “leave no stone unturned” in uncovering the basis for what it described as spurious deductions, as pressure mounts on Nigeria’s banking sector to restore trust at a time of growing economic strain.