TheNigerianVoice Online Radio Center

Public Complaints Commission warns banks against extortion

By The Citizen
Listen to article

The Public Complaints Commission (PCC) on Tuesday cautioned commercial banks in Kaduna State against extorting innocent customers through unfair service and interest rate charges.

The commission’s Commissioner in the Kaduna State, Alhaji Muhammad Maude, gave the warning at a news conference in Kaduna.

According to him, the commission's investigation has revealed that commercial banks in the state introduced all kinds of loan packages targeting low income earners, particularly teachers.

Maude said that the loans were designed specifically to extort their customers through strangulating interest rates.

He said that after receiving complaints from teachers on the matter, the commission immediately carried out an investigation.

“Our investigation showed that the banks give loans of N1 million or more mostly to the teachers and collect pay slip as collateral.

“But what we found mischievous and irritating is that the banks will give the customers the loan on a fixed interest rate and agree on repayment schedule of 12 months, including interest rate.

“For example, if you collected N500, 000 as loans and the initial agreement is that you will pay N650,000 by the time you finished repayment within 12 months.

`By the time you are in the eight month of repayment, the bank will increase the repayment period by another six months, deducting the same interest rate.

“At the end of the day, these teachers end up paying almost 100 per cent of the amount they collected as interest.

“It is not fair to lure people to this strangulating policy. This is clearly extortion, it is unfair and unjust,'' he said.

Maude said the commission had already taken the matter to the Central Bank of Nigeria (CBN) to look into, adding that the CBN had already written to appropriate authorities.

He assured members of the public of the commission’s readiness to look into their complaints free.

The News Agency of Nigeria (NAN) reports that the commission was established in 1975 to handle issues relating to administrative injustice weather by the federal, state or local governments.

It is also to look into companies registered under the Companies and Allied Matters Acts of the Federal Republic of Nigeria.

The commission's services are free and open to both citizens and non-citizens residing in the country. (NAN).