The Banks, The Depositor And The CBN’s Missing Regulatory Bite
The relationship between a bank and its customer is founded on trust, but trust cannot survive indefinitely where the depositor is required to scrutinise every transaction to protect money entrusted to a financial institution.
For millions of Nigerians, the bank account has become an indispensable instrument of economic life. Salaries are received through it, businesses transact through it, families depend on it for transfers and payments, and savings are held in the expectation that the institution managing them will operate within the law and the terms of the banking relationship.
Yet the growing complaints about unexplained deductions, disputed service charges, unauthorised debits and the difficulty of securing refunds raise a question that goes beyond the conduct of individual banks. It concerns the effectiveness of the Central Bank of Nigeria’s regulatory authority and whether the rules designed to protect depositors are being enforced with sufficient consistency and consequence.
The issue is not that Nigeria lacks regulations. The more troubling question is why customers continue to encounter problems that the existing regulatory framework was specifically designed to prevent.
The Central Bank of Nigeria’s Consumer Protection Regulations, issued in December 2019, establish obligations for financial institutions under its regulatory authority. They provide for transparency, fair treatment, complaint resolution and the correction of wrongful transactions. They also impose responsibilities on institutions to identify recurring complaints, investigate their causes and take remedial action.
The CBN’s Guide to Charges by Banks and Other Financial Institutions, effective January 1, 2020, provides another important layer of protection. It specifies permissible charges, identifies services that should be free and establishes conditions governing the introduction and application of fees.
These are not voluntary suggestions. They are regulatory requirements.
The Guide also makes provision for prior written CBN approval for new charges or services not already covered. Where a charge is negotiable, the customer must be informed of the right to negotiate, and any agreement must be established through a verifiable means.
The principle is straightforward. A bank cannot simply invent a charge, impose it without proper authority or conceal the basis on which a customer’s account is debited.
The provisions on free services are equally important. Reactivation of accounts, closure of accounts, mandatory monthly account statements, email notifications, PIN reissues and resets, withdrawals from the issuing bank’s ATM and certain intra-bank transactions are among the services expressly listed as free under the applicable provisions.
Naira debit card maintenance on current-account-linked cards is also free, although the Guide permits a maximum quarterly maintenance charge of ₦50 for cards linked to savings accounts. Foreign-currency-denominated cards are subject to a separate annual maintenance charge.
These distinctions matter. Consumer protection depends not merely on the existence of a list of charges but on the correct application of each provision to the appropriate account, service and transaction.
The CBN’s regulatory framework goes further than prescribing permissible charges. It places an obligation on financial institutions to correct wrongdoing when it occurs.
Under the Consumer Protection Regulations, institutions are required to refund identified excess charges, underpayments of interest and unauthorised debits, with applicable interest. They are also required to issue apology letters, reconstruct accounts where necessary and address the underlying causes of recurring complaints.
The regulations provide for root cause analysis reports to be submitted to the CBN quarterly. These reports are intended to identify the frequency of complaints, the causes of recurring problems and the remedial steps taken by the institutions concerned.
This is significant because the regulator is not expected to wait indefinitely for individual customers to discover every irregularity. A properly functioning consumer protection system should identify patterns, establish responsibility and compel corrective action.
The enforcement provisions are equally explicit. Failure to resolve complaints within stipulated timelines attracts a penalty of ₦500,000 per complaint for every week the breach continues. Failure to acknowledge complaints or provide tracking numbers attracts a penalty of ₦2 million per complaint. Failure to respond to a request or comply with a CBN directive also attracts a ₦2 million penalty. Persistent breaches may attract further administrative sanctions against responsible officers.
The Guide to Charges provides additional sanctions. It prescribes a penalty of ₦2 million per infraction. Where a particular charge is wrongfully imposed on customers, the penalty applies to that charge for each affected customer. Failure to comply with a CBN directive relating to an infraction attracts a further ₦2 million daily until compliance. Failure to properly log complaints in the Consumer Complaints Management System and provide the required reference code also attracts sanctions.
The question, therefore, is not whether the CBN possesses regulatory instruments. It does. The question is whether the available enforcement machinery is producing the necessary deterrent effect.
The CBN’s own disclosures provide grounds for asking that question.
In August 2023, the Bank reported that approximately ₦115 billion and US$22 million had been recovered over an eleven-year period in connection with excess charges and customer complaints. That disclosure demonstrated that the problem was neither imaginary nor entirely beyond regulatory intervention.
However, the recovery of money, important as it is, should not become the principal measure of regulatory success. A regulator cannot continually celebrate the recovery of funds while leaving the public uncertain about whether the practices responsible for those recoveries have been permanently corrected.
A refund restores money to an affected customer. It does not automatically establish that the institution has changed the conduct that produced the wrongful debit. Nor does it answer whether the same practice has affected other customers who may never have noticed the deduction or possessed the time and knowledge to challenge it.
The CBN’s December 2025 Financial Stability Report presents another important dimension. Complaints relating to excess charges rose from 156 in the first half of 2025 to 1,089 in the second half. That represents an increase of approximately 598 per cent.
The figures deserve serious attention. They do not, by themselves, establish that every complaint represents a proven regulatory violation. Complaints must be investigated, and allegations must be distinguished from established findings. But a rise of this magnitude is a legitimate reason for regulatory scrutiny, particularly when the subject concerns charges that are already governed by detailed rules.
The report also recorded 534 complaints resolved or closed in the second half of 2025. It disclosed total claims across all complaint categories of ₦13.60 billion and US$4.38 million during that period, while refunds across all complaint categories amounted to ₦10.28 billion and US$4.39 million.
These figures must be read with care. The claims and refunds cover different categories of complaints and should not be presented as though every refund directly corresponds to the claims recorded in the same period. Nor should the total refunds be attributed exclusively to excess bank charges.
Nevertheless, the wider picture reinforces the need for stronger consumer protection and transparent reporting. The volume of complaints, the sums involved and the continuing need for refunds raise legitimate questions about the effectiveness of existing safeguards.
There is also evidence in the public disclosures of individual financial institutions that regulatory sanctions are not merely theoretical.
Zenith Bank’s 2024 annual report disclosed penalties of ₦14 million relating to non-compliance with a CBN directive on reconciliation of customer charges and ₦2 million for late resolution of a customer complaint.
That disclosure is important, but it must be interpreted accurately. It establishes that the bank reported regulatory penalties in those areas. It does not, by itself, prove that a particular customer was unlawfully charged or that every disputed deduction was wrongful.
The point is broader. Where regulated institutions disclose penalties for failures connected with customer charges and complaint resolution, the regulator must ensure that such sanctions are accompanied by effective correction, compliance monitoring and institutional accountability.
A penalty that is treated merely as another operating expense may not achieve the deterrence intended by the regulation. The objective must be to make non-compliance more costly than compliance, while ensuring that affected customers receive the restitution to which they are entitled.
The ATM withdrawal charge provides another illustration of why regulatory communication and enforcement matter.
Under the CBN circular issued on February 10, 2025, and effective from March 1, 2025, withdrawals from a customer’s own bank’s ATM remain free. Withdrawals from another bank’s on-site ATM attract a charge of ₦100 for every ₦20,000 withdrawn. At off-site ATMs, the charge is ₦100, with an additional surcharge that must not exceed ₦500 per ₦20,000 withdrawal. That surcharge must be disclosed to the customer at the point of withdrawal.
The previous arrangement allowing three free monthly withdrawals at other banks’ ATMs was discontinued.
The issue here is not whether the CBN can revise its charges framework. It can. It is whether customers receive clear information and whether banks apply the approved charges precisely as prescribed. Transparency at the point of transaction is essential. A customer should not have to discover an additional charge after the transaction has been completed.
There is also the question of the proposed revision to the Guide to Charges. On April 21, 2026, the CBN issued an exposure draft of a revised Guide and invited comments up to May 8, 2026.
An exposure draft is not the same as an operative regulation. Until the CBN issues a final version and specifies its effective date, the public should not be left to guess which provisions have changed or when any replacement framework becomes binding.
The CBN should therefore clarify the status of the proposed revision, indicate whether a final Guide has been issued and make the applicable version readily accessible to banks and their customers.
But regulatory clarification alone will not resolve the deeper problem.
The CBN needs to move beyond general assurances and provide a more visible account of enforcement. Nigerians should be able to see how many complaints relating to excess charges have been investigated, how many were established, how many institutions were directed to refund customers, how much was actually refunded, which institutions failed to comply and what sanctions followed.
Such reporting should distinguish complaints received from violations established, refunds ordered from refunds completed, and penalties imposed from penalties actually recovered. It should also identify recurring patterns without compromising legitimate customer confidentiality.
There should be a clear distinction between a bank that promptly identifies and corrects an error and one that repeatedly ignores complaints, delays refunds or fails to comply with regulatory directives. The regulatory response should reflect the seriousness and persistence of the breach.
The CBN should also make greater use of the root cause analysis reports already required under its Consumer Protection Regulations. If institutions are submitting quarterly reports identifying recurring complaints and remedial measures, those reports should inform active supervision. Repeated complaints about the same charge, service or banking practice should trigger closer examination rather than remain buried in administrative returns.
The depositor should not be made the principal enforcement officer in a system where the regulator already possesses statutory authority, supervisory powers and prescribed sanctions.
Banks are commercial institutions. They are entitled to legitimate charges for services rendered, provided those charges are lawful, transparent and properly disclosed. But the commercial interests of a financial institution cannot override the rights of the customer or the regulatory obligations governing the relationship.
The CBN, for its part, must demonstrate that its consumer protection framework is more than an impressive collection of rules. Its authority must be visible in the consistency of its supervision, the speed of its interventions and the consequences of persistent non-compliance.
A regulatory system should not depend on how determined a customer is to pursue a complaint, how familiar that customer is with banking regulations or how much time can be devoted to challenging a deduction. Protection must be institutional, not accidental.
The depositor’s account is not a revenue collection centre for the bank. Every debit must have a lawful basis, every charge must be transparent, and every wrongful deduction must attract restitution and, where appropriate, punishment.
The real test of regulation is not how many rules are written, how many complaints are received or how much money is eventually recovered. It is whether the conduct that necessitated intervention is brought to an end.
