It’s becoming one-week-one-trouble for First City Monument Bank (FCMB).
While the world is still talking about Lisa Nwakoby, one of their branch managers who allegedly committed suicide on Friday, July 29, 2016, in Lekki, Lagos, over a N350 million loan gone awry, the bank founded Otunba Subomi Balogun has been slammed again by the Consumer Protection Council.
YES INTERNATIONAL! Magazine gathered that the CPC just ordered FCMB to refund a whopping N1,543,775,841.78 billion to Bauchi State Government!
The money was alleged to have been deducted from the government’s loan account with the bank. CPC gave the order after investigating a petition submitted to it by the Bauchi State Government and in which it accused FCMB of allegedly short-changing it via excess interest and other charges, totaling N1,864,188,594.78.
Equally petitioned by the bank was the Central Bank of Nigeria (CBN). Their grievances to the apex bank were contained in a letter dated July 15, 2016.
The loans, we learnt, were procured in 2009. The first one was N10 billion. And then the second one, which was N3 billion. At a floating interest rate of 13 percent. It was the upping of the interest rate to 21 percent that threw both parties apart.
After looking into the matter, CPC found FCMB ‘guilty’. And not only that, they equally ordered them to refund about N1.5 billion to the Bauchi State Government. The order, they added, must be carried out under 30 days. Said CPC to FCMB, now headed by Otunba Balogun’s son, Ladi:
“Having reviewed the various responses, documents and presentations made by the parties at the investigative hearings, the Council said it found that the increase in the interest rate was not duly communicated to Bauchi government and that the interest rates applied across board by FCMB were excessive and arbitrary with some charges as high as over 50 per cent.
“The Council also found that apart from the arbitrary and excessive interest charges, the substantial part of the unlawful deductions was made from the principal loan repayment.
“Also identified as part of the illegal deductions by CPC’s investigation was the excess processing fees and even management fee which was not provided for in the offer letters.
“The government agency ordered FCMB to report compliance to the Order within 30 days of receipt. It also ordered the bank to develop and present to it a Customer Complaint Resolution Policy within 30 days of the receipt of the Order and post same on its website…”