The Consumer Protection Council of Nigeria, CPC has ordered the First City Monument Bank, FCMB a tier 2 bank in Nigeria, to refund at least NGN1.542 billion the bank illegally deducted from the Bauchi State loan account.
The CPC issued out the order after the Council concluded its investigation into an allegation by the Bauchi State Government that the bank had illegally deducted at least NGN1.84 billion from its loan account.
”FCMB, which was then known as First Inland Bank Limited, granted BASG two-term loans of NGN10 billion and NGN3 billion in 2009 and 2011 respectively at 13 per cent floating interest rate as claimed by the state government, while FCMB said it was increased to 21 per cent, raising dispute as to whether or not the increase in interest rate was duly communicated to BASG,”
The Council said “Having reviewed the various responses, documents and presentations made by the parties at the investigative hearings, the council disclosed that it found out that the increase in the interest rate was not duly communicated to BASG and that the interest rates applied across board by FCMB were excessive and arbitrary, with some charges as high as over 50 percent,”
The CPC said FCMB should “present written assurances in line with Section 10 of the Consumer Protection Council Act that they will refrain from a continuation of any conduct which is detrimental to the interest of consumers of banking services”.
If this amount is refunded, it might be the largest amount ever recovered from any bank in Nigeria by the CPC till date.
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