By Emamuzo Iboma
Amid widespread concerns over irregular deductions and charges on deposit accounts, many Nigerian bank customers are also victims of banks’ failure to pay owed interest or outright withholding of accrued interest on savings accounts. Despite regulations stipulating that savings account holders are entitled to interest based on the Central Bank of Nigeria’s (CBN) Monetary Policy Rate (MPR) of 27.5%, with banks offering at least 30% of this rate, many customers remain uninformed or are shortchanged.
While some banks withhold interest due to exceeding withdrawal limits or maintaining balances below minimum thresholds, reports reveal that many depositors are unaware of how interest is calculated or why they are not earning it. Some customers who opened savings accounts expecting modest monthly interest have instead been disappointed, often due to frequent withdrawals or lack of transparency.
Experts regard savings accounts as secure and vital tools for wealth accumulation. Advans Nigeria, a microfinance bank, recommends them for achieving financial goals. However, individuals like Yemisi Owolabi, who hoped to build wealth through her savings, have faced frustration. She has been denied interest despite maintaining a balance of about N2 million for six months, after unknowingly disqualifying herself due to frequent withdrawals.
“I was told my frequent withdrawals prevented me from earning interest,” Owolabi lamented. She subsequently opened a fintech account for daily transactions but still received no interest from her traditional bank account, which she kept untouched. Meanwhile, charges continue to deplete her funds.
Veteran financial journalist Ademola Adebisi shared similar experiences, noting that banks often fail to communicate or pay interest transparently. “I only recently discovered that one of my banks credited me with N3,780 labeled ‘credit interest capitalized,’ but this shouldn’t have been a surprise. My other savings account remains inactive in terms of interest payments,” he said.
Adebisi expressed concern over banks’ profit-driven motives, criticizing their lack of fairness in rewarding depositors and their high lending rates. “If banks continue to profit from depositors’ funds without fair returns, I may move my money to mutual funds,” he warned.
Banks generate significant profits through loans and investments in high-yield instruments like treasury bills and bonds, yet customers argue that the low interest rates on savings and the banks’ non-disclosure of interest payments are unjust.
Dr. Uju Ogubunka, President of the Bank Customers Association of Nigeria (BCAN), explained that withholding interest might sometimes result from system errors or negligence, but persistent failure to pay could be deliberate to inflate bank profits. He advised customers to pursue redress through established channels.
“Visit your bank to inquire about unpaid interest, submit a written complaint detailing the period concerned, and escalate unresolved issues to the Subcommittee on Ethics and Professionalism at the Bankers’ House in Lagos,” Ogubunka recommended. This subcommittee, under the Bankers’ Committee led by the CBN, handles consumer complaints. Customers can also escalate their cases to the CBN or Nigeria Deposit Insurance Corporation (NDIC).
While penalties for defaulting banks remain unclear, regulatory frameworks like the Guide to Bank Charges and potential interest penalties can be applied. Ogubunka urged customers to join BCAN to strengthen their voices and access support.
“We provide a platform for customers to learn their rights and advocate for fair treatment,” he emphasized.
