House Of Representatives Pushes For Stronger Penalties On Banks Over Unauthorized Transactions
The House of Representatives has voiced overwhelming support for a proposed bill aimed at enforcing stricter sanctions on money deposit banks found guilty of unauthorized transactions and deductions from customer accounts. During a debate on the bill’s general principles, lawmakers backed the amendment to the Banking and Other Financial Institutions Act, 2020, sponsored by Hon. Moses Fayinka.
Leading the debate, Hon. Fayinka highlighted that bank fraud and unauthorized withdrawals have reached alarming levels in Nigeria, with over 100,000 cases reported in 2022 and nearly 50,000 in 2023, costing customers billions of naira. He pointed out the need for legislative action to curb the rising cases of fraud and protect customers who have suffered significant financial losses.
The bill’s objectives include preventing banks from authorizing fund transfers without customer consent, mandating that banks take swift action against fraudulent activities, and requiring banks to cover all recovery-related costs and refund affected customers without additional charges. Fayinka noted that banks must fulfil their duty to secure customer funds, especially with the surge in electronic transactions.
Hon. Ahmed Jaha, Chairman of the House Committee on Insurance and Actuarial, stressed the bill’s importance, referencing unauthorized debits that affected several people in the National Assembly. Similarly, Hon. Bello el-Rufai, Chairman of the House Committee on Banking Regulations, emphasized that all Nigerians are impacted by this issue, calling for more substantial fines and penalties to be enforced by the Central Bank of Nigeria.
The bill was subsequently referred to the House Committee on Banking Regulations for further legislative review.
