The Consumer Protection Council (CPC) has ordered the First City Monument Bank (FCMB) to refund N1, 542,775,841.58 to the Bauchi State Government, being the total sum of illegal deductions made from the state government’s loan account with the bank.
The CPC gave the order after the conclusion of its investigation into a petition from the Bauchi State Government, alleging that it had been short-changed by FCMB with N1, 864,188,594.78 excess interest and other charges on its loan account with the bank.
The Bauchi State Government sent the petition to the Council after the Central Bank of Nigeria (CBN) declined further adjudication on the case through a letter dated July 15, 2015 to the petitioner, asking it to “seek alternative means of redress as the case is hereby deemed closed.”
The CPC said FCMB, which was then known as First Inland Bank Limited, granted Bauchi two term loans of N10 billion and N3 billion in 2009 and 2011 respectively at 13 per cent floating interest rate as claimed by the state government, while FCMB said it was increased to 21 per cent, raising the dispute as to whether or not the increase in interest rate was duly communicated to the state.
The statement by the CPC added, “Following the complaint to CPC by Bauchi, the Director-General constituted a panel of experts, including those from the office of the Accountant-General of the Federation, which deliberated extensively on the matter, and provided the parties repeated opportunities to make representations.
“Having reviewed the various responses, documents and presentations made by the parties at the investigative hearings, the Council said it found that the increase in the interest rate was not duly communicated to Bauchi government and that the interest rates applied across board by FCMB were excessive and arbitrary with some charges as high as over 50 per cent.
“The Council also found that apart from the arbitrary and excessive interest charges, the substantial part of the unlawful deductions was made from the principal loan repayment.
“Also identified as part of the illegal deductions by CPC’s investigation was the excess processing fees and even management fee which was not provided for in the offer letters.
“The Council therefore ordered FCMB to refund to BASG all excess interest charges and unlawful deductions in the total sum of N1,542,775,841.58 and at the prevailing interest rate.
“According to the Council, this order is in line with its functions to provide redress for unscrupulous exploitation of consumers by companies, firms, trade associations or individuals, under Section 2 (i) of the Consumer Protection Council Act, Cap. C25 of the laws of the Federation of Nigeria, 2004.
“The government agency ordered FCMB to report compliance to the Order within 30 days of receipt. It also ordered the bank to develop and present to it a Customer Complaint Resolution Policy within 30 days of the receipt of the Order and post same on its website.
“In addition, CPC also directed the bank to “present written assurances in line with Section 10 of the Consumer Protection Council Act that they will refrain from a continuation of any conduct which is detrimental to the interest of consumers of banking services.”
The Council further disclosed that it had communicated all the Orders given to the bank to the Central Bank of Nigeria.
Commenting on the development, the Council’s Director General, Dupe Atoki, charged Nigerian banks to realise that their customers, either corporate or individual, symbolise the essence of their existence, and therefore should exhibit high level of professionalism and ethical practice in their interaction with the customers.
Mrs. Atoki assured that the Council would continue to fight for the rights of aggrieved consumers in any sector of the country’s economy.
FCMB is yet to respond to PREMIUM TIMES’ request for comment.
E-mails, text message and telephone calls were made to the bank’s Group Head of Corporate Affairs, Diran Olojo, on Sunday afternoon.
Mr. Olojo reverted to say he was vacationing abroad, and that his colleague, Lola Egboh, would respond to our enquiry.
Ms. Egboh is yet to do so as at 10 am on Monday when this story was approved for publishing.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To advertise here . Call Willie +2347088095401...