CPC Directs FCMB To Return N1.54bn To Bauchi Government

The Consumer Protection Council (CPC) has ordered First City Monument Bank (FCMB) to refund, within 30 days, the sum of N1.54 billion it deducted from the Bauchi State Government’s loan account as interest charges.

The council said it established after investigations that the bank had illegally deducted the amount from the state government.

It explained that it gave the order after the conclusion of investigation into a petition from the state government which alleged that it had been short-changed by FCMB to the tune of N1, 864,188,594.78 which arose from excess interest and other charges on its loan account.

It was gathered that the state government had resorted to petitioning the council after the Central Bank of Nigeria (CBN) allegedly declined further adjudication on the case through a letter dated July 15, 2015 to the petitioner, asking it to “seek alternative means of redress as the case is hereby deemed closed.”

The CPC further disclosed that FCMB, which was then known as First Inland Bank Limited, granted the state government two-term loans of N10 billion and N3 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 percent, raising the dispute as to whether or not the increase in interest rate was duly communicated to the state.

However, acting on the complaint from the state government to the council, the director-general constituted a panel of experts, including those from the office of the Accountant-General of the Federation (AGF), which deliberated extensively on the matter, and provided the parties repeated opportunities to make representations.

The council noted that following the review of the various responses, documents and presentations made by the parties at the investigative hearings, it found the increase in the interest rate was not duly communicated to the state government and that the interest rates applied across board by FCMB were excessive and arbitrary with some charges as high as over 50 percent.

It added that the probe had further established unlawful deductions of excess processing and management fees which was not provided for in the offer letters.