Omolabake Fasogbon

In addition to irregular deductions and charges on deposit that frustrate bank customers, financial institutions have also been at many times found culpable of irregular payment or outright withholding of interest on savings account of uninformed customers.

By regulations, savings account holders are entitled to a certain percentage of interest, determined by Central Bank of Nigeria’s (CBN) Monetary Policy Rate (MPR) currently at 27.5 percent, with banks offering at least 30percent interest of prevailing MPR as interest. Customers thus tend to earn more interest as large as their account balances are.

There are however exceptions to this benefit, including exceeding allowable withdrawal limits, often decided by individual banks and maintaining a balance below a bank’s minimum threshold.

THISDAY search revealed a good number of savings account holders in the country are less informed about how this bank product. While some depositors were either unaware or indifferent about interest, others were unclear about how interest is calculated. But some others who deliberately opted for savings account in hopes of earning modest monthly interest said they ended up being disappointed.

Meanwhile, experts consider savings account as a secure and convenient product to store money while earning interest.

A Microfinance bank, Advans Nigeria in one of its newsletters, even recommended this account type to achieve financial goals and and accumulate wealth.

For Yemisi Owolabi, who desires to accumulate wealth via her savings account with one of the new generation banks, it was a dream aborted.

She said she has been constantly denied interest on her modest savings, despite looking forward to a monthly token. Unaware of the bank’s withdrawal policy, Owolabi had been making frequent withdrawals, unknowingly disqualifying herself from interest accrual.

She added, “It was until I complained to the bank that I was told that my frequent withdrawals was what prevented me from earning interest. Hearing this, I opened another account with a fintech platform which I used for daily transactions, and I kept saving and not withdrawing from my traditional bank account, yet I didn’t get any interest on my about N2million balance for six months now.”

She noted, however, that the bank has not ceased to deduct several charges on her account, despite she was not making any withdrawals.

Owolabi is not alone on this, a veteran financial journalist, Ademola Adebisi said, despite his experience reporting finance, it never occurred to him savings account should yield interest because he had never received any, adding that banks often remain silent this benefit.

“Banks need to do more in educating customers on this product. It only recently dawned on me after a bank that I have used for many years, perhaps accidentally, credited my account with N3,780 labelled ‘credit interest capitalized’. Obviously, this shouldn’t be the first time I should get such, the bank is not transparent in this regard. My second bank is even worse because I only save on it without withdrawing. Yet, I have never received interest on it despite I have a lump sum balance in it”.

Adebisi expressed worry that banks continue to profit from depositors’ fund without offering fair returns, decrying further that they charge exorbitantly on loans to same depositors.

“I will find time to go and complain, if they remain recalcitrant, I will move my money to mutual fund,” he flared.

By lending to businesses and investing in high- yield financial instruments like treasury bill and government bonds to generate massive returns, banks have continued to thrive on depositors’ fund.

Although customers already find prevailing interest on savings low viz a viz 29 percent lending rate, that banks are still not honest with this payment is being considered unjust.

President of Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, said the act of withholding accruable interest on customers’ savings may be or not deliberate bank’s intention, adding that the anomaly may have also resulted from system flaws and human error.

“Some staff may not be adequately trained. Sometimes, it’s outright carelessness. But if it becomes a pattern, then it may be deliberate, perhaps to inflate the bank’s profit and loss (P&L) numbers,” he explained.

He informed, however, that it is not out of place that customers seek redress when banks fail to remit interest on their savings account or when being shortchanged.

He disclosed that there are appropriate channels which complainants should follow to get issues resolved, and possibly get compensated.

“If you have a savings account and the bank has not been paying interest, the first line of action is to walk into the bank and make an inquiry. If nothing is done, put your complaint into writing, detail the specific period and demand an explanation.

“Customers whose complaints remain unresolved should escalate the matter to the Subcommittee on Ethics and Professionalism housed at the Bankers’ House in Lagos,” he urged.

Ogubunka clarified that the subcommittee, set up under the Bankers’ Committee chaired by the Central Bank of Nigeria (CBN), is responsible for handling such consumer complaints.

“You can reach the subcommittee by email or post regardless of your location in Nigeria. If you’re still not satisfied, you can take the case further to the CBN or the Nigeria Deposit Insurance Corporation, NDIC”, he added.

The chartered banker is uncertain about existing penalties for defaulting operators, he said regulatory frameworks like the Guide to Bank Charges can however be applied.

“In some cases, regulators may impose additional percentage interest as a form of penalty”, he said.

Above all, he encouraged bank customers to enlist in BCAN to amplify their voices and access support.

“We provide a platform for customers to learn their rights and voice their concerns”, he added. (THIS DAY)