These are not the best of times for First City Monument Bank (FCMB) led by Ladi Balogun, son of the bank’s founder, Otunba Subomi Balogun as the Consumer Protection Council (CPC) has ordered the bank to refund N1,542 billion  to the Bauchi State Government (BASG), being the total sum of illegal deductions made from the state government’s loan account with the bank.

Bauchi State Government petitioned CPC and after the conclusion of its investigation into the petition, alleging that it had been short-changed by the bank to the tune of N1,864,188,594.78 excess interest and other charges on its loan account with the bank, CPC gave the order.

CPC disclosed that FCMB, which was then known as First Inland Bank Limited, granted BASG 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 BASG.

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 BASG 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 management fees, which were not provided for in the offer letters.

The council therefore ordered FCMB to refund to BASG all excess interest charges and unlawful deductions in the total sum of N1,542,775,841.58 and at the prevailing interest rate.