Consumer protection: CBN goes strict on banks

Consumer protection: CBN goes strict on banks

The Central Bank of Nigeria (CBN) recently demonstrated its commitment to protect consumer’s rights by sanctioning banks whose money transfer transactions exceed four minutes.

This development got stakeholders worried with some of them giving an insight into how financial services providers can avoid sanctions that may eat into their capital.

Last month, four banks were sanctioned to the tune of N5.87 billion. The affected banks are Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond Bank.

Their offence was the violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995, of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006.

In May 2017, CBN also banned 17 banks from dealing in the SME wholesale forex window for deliberately frustrating efforts by many Small and Medium Enterprises to access the new window created by the apex bank.

The apex financial body took the decision to bar the erring banks based on reports which disclosed that only eight banks had sold forex to the SMEs segment since the inception of the new window.

The eight banks were Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank.

Just last week, the CBN’s Director of Banking and Payments System Department, Dipo Fatokun, came out with a circular enforcing a N10,000 fine on any bank whose money transfer exceeds four minutes.

The circular stated that any failed instant payment transaction not reversed into the customer’s account within 24 hours, based on the complaint of the sender and/or the beneficiary, will attract another fine of N10,000.

The President of Bank Customers Association of Nigeria (BCAN), Uju Ogubunka, deemed it a very good development if banks could affect transactions within the quickest possible time.

He said, “If that is what CBN is directing banks to do, I think that is very good. In fact, it is very excellent, so that we can fast track transactions; and people can put their minds at rest and do other things.

“A situation where you make a transfer and takes several hours, and sometimes, days to get to the beneficiaries is not good enough.

“And I think that the technology available today supports faster delivery of such services. It is one thing, however, for CBN to make this regulation and it is another thing for it to follow it up.

“But how will CBN know that the transaction is not consummated within four minutes or within 24 hours, except maybe somebody reports. And how many people are ready to report?

“Another issue is that if CBN penalises the bank, who takes the benefits of that penalty in terms of value; the N10000?

“Are you going to credit it to the customer that was shortchanged? Or CBN will take it? Or CBN will accumulate all of this for the training, education or for the enlightenment of the customers?

“That is another question. Or will CBN begin to declare it as part of its own earnings?”

The regulation is expected to take effect from next month.

 

 

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