The House of Representatives moved on Tuesday to address widespread issues of unauthorized deductions by commercial banks from customer’s accounts, following the second reading of a bill designed to amend the Banking and Other Financial Institutions Act.
Sponsored by Moses Fayinka, representing Mushin II Federal Constituency, Lagos State, the bill aims to tackle cases of illegal withdrawals impacting millions of bank customers.
Fayinka highlighted the prevalence of unauthorized deductions, revealing staggering figures of 101,801 reported cases in 2022 and 48,703 in 2023.
“There is an alarming rise in bank fraud or unauthorized withdrawal of deposit funds in Nigeria,” he stated.
“Bank customers have lost billions of naira due to these unauthorized transactions, which often go unaddressed,” he added.
The proposed bill seeks to prevent unauthorized transactions and strengthen accountability within the banking sector.
Fayinka explained, “This bill aims to stop illegal fund transactions where money is withdrawn without customer authorization, to prevent banks from covering up such syndicates, and to ensure that both paying and receiving banks work with law enforcement to hold perpetrators accountable.”
The legislation also mandates full refunds to victims’ accounts without additional charges.
In support of the bill, Ahmed Jaha, representing Damboa/Gwoza/Chibok Federal Constituency in Borno State, criticized the frequent small deductions that, when accumulated, amount to significant sums.
“People in the National Assembly, myself included, receive unexplained debit alerts,” Jaha noted.
“While individually these amounts may seem negligible, together they amount to millions,” he continued.
Mohammed-Bello El-Rufai, a House member from Kaduna State, echoed these concerns, urging the Central Bank of Nigeria to impose stricter penalties on commercial banks found levying unauthorized charges on customers.
The bill represents a decisive step by the House of Representatives to protect consumers from financial misconduct within the banking sector.
