Nigerian bank customers raise concerns over rising transaction charges

Customers urge CBN to address bank charges discouraging deposits

Bank customers in Nigeria have raised concerns that increasing transaction charges and service fees are discouraging them from depositing money in financial institutions, warning that the trend could weaken confidence in the banking system.

Several customers who spoke to the News Agency of Nigeria (NAN) said the cumulative effect of bank charges-including SMS alert fees, stamp duties, electronic transfer charges, and maintenance fees- has significantly increased the cost of maintaining bank accounts.

According to the customers, these deductions often occur multiple times within a single month, making it difficult for individuals to preserve savings in the formal banking system.

Customers highlight impact of multiple charges

One customer, Evelyn Oputa, expressed concern about the volume of deductions applied to her account through different service charges and taxes.

She noted that charges such as stamp duty, electronic transfer levies, and SMS alert fees are frequently deducted from customer accounts, adding to the financial pressure many Nigerians currently face.

Oputa also pointed out that while some of these charges are remitted to the government, the combined effect of taxes and bank fees ultimately falls on customers.

Similarly, another customer, Akolam Nzeh, said the increasing charges have become difficult to manage amid broader economic challenges.

He argued that the rising cost of banking services contrasts sharply with stagnant income levels, noting that salaries have largely remained unchanged while financial service charges continue to increase.

Implications for financial inclusion

Industry analysts warn that excessive banking charges could undermine efforts to expand financial inclusion in Nigeria.

Financial inclusion initiatives encourage individuals and small businesses to participate in the formal banking system through savings accounts, digital payments, and electronic transfers. However, rising service fees may discourage some customers from using banks regularly.

Reports indicate that charges commonly associated with bank accounts include transaction fees, card maintenance charges, electronic transfer levies, and Value Added Tax (VAT) applied to certain banking services.

While each fee may appear modest individually, their combined impact can significantly increase the cost of financial transactions, particularly for low-income earners and small business operators.

Role of regulation in banking charges

Banking charges in Nigeria are guided by regulatory frameworks issued by the Central Bank of Nigeria (CBN), which periodically reviews the structure of fees applied by deposit money banks.

These regulations aim to standardise service charges while supporting the country’s transition to a digital and cash-light financial system. Policies such as Nigeria’s cashless initiative were introduced to reduce reliance on physical cash and encourage electronic transactions.

However, some customers argue that the growing number of transaction-related charges could discourage participation in the banking system rather than promote it.

Outlook

The concerns raised by customers highlight the delicate balance between revenue generation for financial institutions and maintaining accessible banking services for the public.

For policymakers and regulators, the issue underscores the importance of ensuring that banking charges remain transparent, proportionate, and aligned with broader financial inclusion objectives.

Addressing these concerns may be critical to sustaining public trust in Nigeria’s banking system and ensuring that more citizens continue to use formal financial services.