By BLAISE UDUNZE
In a society where trust is the lifeblood of finance, Nigeria’s banking sector seems to be bleeding credibility at an alarming rate. The relationship between banks and their customers that was once defined by confidence and reliability has gradually shifted into one coloured by suspicion, frustration, and resentment.
Across the country, Nigerians now speak of their banks not with loyalty, but with a weary sense of inevitability, just like tenants trapped in a bad lease. It is no longer just about economic hardship; it is about the growing perception that the very institutions meant to protect people’s money are quietly exploiting them.
Despite repeated Central Bank of Nigeria (CBN) sanctions for breaching its Guide to Charges by Banks and Other Financial Institutions, banks continue to extract billions of naira from customers through transfers, withdrawals, ATM fees, SMS alerts, and account maintenance. With over 312 million active bank accounts in the country, these charges have become a lucrative revenue stream, now contributing more to profitability than traditional lending or genuine financial intermediation. N10 here, N50 there, small sums that, when multiplied across 312 million active bank accounts, translate into billions (N15,600,000,000 when multiplied by N50 charges) silently siphoned from the public’s pockets each month.
The banking public has long tolerated these fees in the name of “service sustainability,” but tolerance has its limits. What might seem like minor deductions of N10 here and N50 there has become a silent tax on trust. For many, these small, routine deductions now make the difference between subsistence and shortfall. Despite the CBN’s efforts to standardise bank charges, many institutions continue to test public patience.
The apex bank’s February 2025 circular (FPR/DIR/GEN/CIR/001/002) introduced new charges for ATM withdrawals: N100 per N20,000 at “on-site” ATMs and up to N600 for “off-site” machines. Debit card maintenance costs N50 per quarter, credit card issuance N1,000, and a security token for online banking up to N2,500. Add to that a 0.005 percent cybersecurity levy, N10-N50 transfer fees, 7.5 percent VAT on services, N6.98 for USSD transactions, N6 per SMS alert, and N50 for stamp duty, and it becomes clear that Nigerians are paying more for access to their own money than for the value banks provide.
The system has made routine transactions financially exhausting, and in the process, the public’s goodwill is being drained faster than their account balances. Economist Paul Alaje of SPM Professionals puts it bluntly: “Banking is not done in Nigeria. What we have is money keeping and charges on deposits.” Nigerian banks appear to have perfected the art of holding deposits and generating profits not from innovation or lending, but from layered fees. A small business owner transferring N500,000 weekly pays N25 as a cybersecurity levy, N50 as a transfer fee, N3.75 as VAT, and N6 for SMS notifications per transaction, which sums to a total of N84.75. Multiply that by a week’s trading cycle, and the deductions become a serious dent in working capital.
Worse still, these fees often lack transparency. Customers discover new deductions like surprise taxes. The Guide to Charges explicitly requires clarity, yet many banks bury costs in technical terms and periodic bulk debits. For the public, this lack of transparency is not just a financial grievance; it’s an ethical one.
Ironically, the same banks that boast of digital transformation now struggle with reliability. Failed transfers, app outages, and delayed reversals have become as common as debit alerts.
In a nation increasingly dependent on digital payments, system failures are not minor inconveniences, but they are breaches of trust. They distort commerce, frustrate small businesses, and undermine confidence in the formal economy. Data tells the story: E-business income for some top-tier banks dropped to N209.34 billion in the first half of 2025 from N215.01 billion a year earlier, signaling operational strain despite increased customer activity. Behind the glossy digital marketing lies an uncomfortable truth, which reveals that many banks are running on outdated infrastructure stretched to breaking point.
If poor service was not enough, liquidity rumours have joined the mix, threatening to shake what’s left of public confidence. In an age of social media, a single viral tweet about a “bank under stress” can trigger panic withdrawals before the facts emerge. Ironically, the data paints a different picture. Banks’ deposits with the CBN surged to N67.72 trillion in the first half of 2025, which represents a 730 percent year-on-year increase. System liquidity even peaked at N5.73 trillion. Yet the same period saw N131.42 trillion borrowed from the CBN by commercial and merchant banks, representing a 636 percent increase.
While these figures suggest active liquidity management rather than crisis, public perception doesn’t follow balance sheets; it follows belief. In banking, perception is reality, and right now, that reality feels shaky.
At the core of this crisis is not just money; it is morality. Banking, at its essence, is a covenant of trust. Customers deposit their earnings in the belief that the system will protect them, not prey upon them. But in Nigeria, that covenant appears frayed. Many banks treat transparency as an obligation rather than a principle. Every policy adjustment is introduced as a necessity, yet it almost always ends up extracting more from the customer than it gives back in service quality.
If banks are to rebuild credibility, they must begin with empathy. Publish clear charge breakdowns in plain language. Communicate promptly when systems fail. Invest in resilient digital infrastructure instead of another rebrand campaign. Recognise that trust is not maintained by advertising slogans; it is earned through consistency, fairness, and accountability.
The CBN, for its part, must match regulatory rhetoric with enforcement. Penalties of N2 million per infraction, as prescribed in its Guide to Charges, are meaningless if rarely applied. A regulator that overlooks systemic overcharging becomes complicit in the erosion of trust it seeks to prevent.
Nigeria’s financial sector cannot grow on distrust. Every hidden charge, every failed transaction, and every rumour left unaddressed chips away at its moral capital. The time has come for the industry to undergo a recalibration from profit obsession to public accountability.
The strength of a banking system is not measured by the size of its headquarters or the number of zeroes in its profits, but by the trust of its depositors. And that trust, once lost, takes more than balance sheet expansion to regain. The Nigerian banking industry must choose between continuing down the path of silent exploitation cloaked in financial innovation or returning to the foundational virtues of integrity, service, and transparency. Only one of those paths leads back to trust.
Blaise, a journalist and PR professional writes from Lagos, can be reached via: blaise.udunze@gmail.com
