The House of Representatives held a critical session on Tuesday to tackle the growing issue of unauthorized deductions from customers’ bank accounts by commercial banks.
The discussion was centered around the second reading of a new legislative proposal titled “Bill for an Act to amend the Banking and Other Financial Institutions Act 2022 and Other Related Matters.”
This bill was introduced by Mr. Moses Fayinka, who represents the Mushin II Federal Constituency in Lagos State.
During the session, Fayinka expressed his deep concern regarding the alarming frequency of fraudulent withdrawals from customers’ accounts. He pointed out that these illicit activities have resulted in the loss of billions of naira by bank customers across Nigeria.
“There is an alarming rise of bank fraud or unauthorized withdrawal of deposit funds in Nigeria. In the banking industry, about 101,801 cases were reported in 2022 and 48,703 cases were reported in 2023, making bank customers lose several billions of naira,” he stated.
Fayinka explained that the proposed bill aims to address the serious issue of financial crimes that often occur within the commercial banking system. He highlighted that with the increasing shift towards electronic banking—through methods like ATM transactions, POS payments, and direct transfers—many customers have fallen victim to unauthorized deductions.
“We all know that virtually all banking transactions are done electronically, which means that transactions can either be ATM, POS, direct cash transfer, fast cash and many others, in which many bank customers have fallen victims and have lost their hard-earned fortune without help from any side,” he added.
The objective of the proposed legislation is clear: to put a stop to illegal transactions where funds are taken from a customer’s account without their permission. The bill seeks to ensure that banks are held accountable for reporting any fraudulent activities to the authorities, enabling the police to take necessary action against the culprits. Furthermore, it aims to ensure that victims receive refunds without incurring additional charges.
Other members of the House also voiced their concerns regarding this issue. Ahmed Jaha, representing the Damboa/Gwoza/Chibok Federal Constituency in Borno State, condemned the issue of multiple deductions. He shared his experience, stating, “Even today, people in the National Assembly saw debit alerts that they did not know where it came from. We ignore these deductions because they are negligible amounts, but when you put it together, it runs into millions of naira.”
In addition, Mohammed-Bello El-Rufai, a member from Kaduna State, urged the Central Bank of Nigeria to impose stricter penalties on banks that unfairly charge their customers. His call for action emphasizes the urgent need for reform in the banking sector to protect consumers from these fraudulent practices.
