The Consumer Protection Council (CPC) has ordered First City Monument Bank (FCMB) to refund N1, 542,775,841.58 to the Bauchi State Government being the total sum of illegal deductions made from the state government’s loan account with the bank.
CPC’s Order was made after the conclusion of its investigation into a petition from the Bauchi State Government, alleging that it had been short-changed by FCMB with N1, 864,188,594.78 excess interest and other charges on its loan account with the bank.
The Bauchi State Government sent the petition to the Council after the Central Bank of Nigeria (CBN) 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.”
CPC disclosed that FCMB, which was then known as First Inland Bank Limited, granted Bauchi 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 per cent, raising the dispute as to whether or not the increase in interest rate was duly communicated to the Bauchi State Government.
Following the complaint to CPC from the Bauchi State Government, the director-general constituted a panel of experts, including those from the office of the accountant-general of the federation, which deliberated extensively on the matter, and provided the parties repeated opportunities to make representations
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 the Bauchi State 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.