Sterling Bank’s good example

FOR some time now, banking has become a harrowing exercise for most Nigerians. When the Automated Teller Machines (ATM) are not dry, the Deposit Money Banks (DMBs), also known as commercial banks, are deducting crazy charges from customers’ accounts, or spurning customer complaints about unauthorised withdrawals from their accounts. Recently, though, a Nigerian bank chose to respond to the mood of Nigerians by cancelling the oppressive regime of charges that literally  drive bank customers nuts. In a landmark move that aims to set a new benchmark for customer-focused banking in Nigeria, Sterling Bank announced that it would no longer deduct charges for local online transactions by its customers. Predictably, the announcement generated a buzz among netizens, some of whom assumed that it was a marketing prank tied to April Fools’ Day. However, the bank confirmed that it was no stunt, and that the zero-transfer-fee policy had taken  immediate effect.

The story is that with this move, Sterling Bank becomes the first major Nigerian bank to take a definitive stand against the long-standing practice of charging customers for everyday digital transfers. Said Obinna Ukachukwu, the Growth Executive lead, Consumer and Business Banking Directorate of the bank: “We believe access to your own money shouldn’t come with a penalty. This is more than a financial decision; it’s a value-based one. It reflects our commitment to making banking fair, inclusive and truly customer-focused. We’re not yet the biggest bank in Nigeria, but we’ve been the boldest. Sterling fearlessly believes in the future of Nigeria, and this is us backing Nigerians with more than words.”

Truth be told, the DMBs have ripped Nigerians off for years,  subjecting them to various questionable deductions that portray them (the DMBs) as being driven essentially by profiteering. As we noted in previous editorials, exploitation and single-minded pursuit of profit maximisation, the very nature of capitalism, characterise Nigeria’s banking business. That is why, as Nigerians are well aware, the banks often appear insulated from the challenges in the domestic economy, declaring huge profits gained from the exaction of their customers even when the economy is tottering. As we have noted time and again, while banks need to charge fees and make reasonable income to defray the high cost of doing business, especially in a clime like Nigeria where there is a paucity of economic infrastructure, the long list of fees and charges usually imposed on bank customers and their compulsory nature are really disconcerting. It is a fact that balances shrink in customers’ accounts even when they have not conducted any transactions on such accounts for some time. The burgeoning list of charges include but are not limited to account maintenance charges, short message service (SMS) alert charges, transfer charges, ATM maintenance charges. And, worse still, many of the banks have long programmed their ATMs in such a way that customers cannot withdraw more than N5,000 or at most N10,000 at once. That is not all: often, in violation of the  regulations by the Central Bank of Nigeria (CBN), customers cannot withdraw more than N20,000 per day from their accounts, the implication being that it was an egregious error to have opened an account in the first place.

Unfortunately, the CBN, the body statutory mandated to regule the activities of the DMBs, has typically turned a blind eye to the flagrant disregard of its guidelines, making life unbearable for Nigerians. Against this backdrop, we do not care about whether or not Sterling Bank’s latest announcement is a business strategy. It is within the rights of a business organisation to roll out a strategy that will place it above or ahead of its competitors, as long as that strategy is in not in conflict with the law. Moreover, Sterling Bank’s cancellation of the charges that Nigerians have complained about for a long time conveys the impression of attentiveness to customers’ complaints and an awareness of the ultimate futility of continuing a practice that effectively discourages banking by treating customers like vassals. Even if it has to be seen as an act of penitence by a financial institution, Sterling Bank’s move is one in the right direction, and it is applaudable. Already, certain Nigerians have openly made a show of opening an account with the bank following its latest move. That is to be expected. A situation where literally no banking transaction can be done without charges bodes ill for customers and the economy, and there can be no offence in seeking to reverse it.

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If Nigerians are groaning, confronted with harsh economic realities, the government owes itself a bounden duty to save them from economic shylocks. The idea of banks consistently witnessing an astronomical rise in profit that derives mainly from the exploitation of customers is untenable. That was certainly not the case in the past when the majority of bank users, namely owners of savings accounts, knew, for instance, that their deposits would attract interest and not criminal deductions. Pray, if customers have to continue paying ATM maintenance charges, then what really does the bank do for them? If it makes more economic sense to keep one’s cash at home instead of taking it to the bank, then what is the whole point about having a bank account? Increasingly, Nigerians are opening accounts with digital platforms that promise a respite from the regime of oppressive charges that characterises the operations of the DMBs and it is becoming clearer by the day that they are revolting against the system, and that banks which fail to follow progressive initiatives like the one announced by Sterling Bank are going to run into trouble waters sooner or later.

We welcome the announcement by Sterling Bank. It is rooted in the everyday experience of Nigerians and shows an awareness of, and respect for, the feelings of the Nigerian populace, the majority of whom are barely able to keep body and soul together, and could certainly do without mindless exploitation in the name of banking.