One of the areas of our specialties is review of bank charges and recovery of excessive charges found therein. We review bank charges with our dedicated Bank Charges Review Software called Banker and developed with consideration for local and international monetary policies. To stay afloat, the banks devised various means of generating income. One of the means but not quite known to many is that of charging excessive and spurious charges on customers and/or the underpayment of interest due to customers. By recovering excessive charges (overcharge) for our clients and securing waivers, their business becomes more profitable.
It is pertinent to note that this exercise is far beyond the scope of both internal and external audit. Experience has shown that people misconstrue this exercise with audit but our clients have since realized the difference after we have worked through their accounts of 2 or 5 audited years and still recovered excessive charges. Below are some of the areas of overcharge we look into:
Sometimes, the rates and fees used for debit interest/ fees on facilities availed might be inconsistent with the laid down monetary policies and might not be as agreed with the bank(s). It is sometimes a fraction of percentage less for credit interest or a fraction of percentage more for debit interest. The implication is that the account holder is denied of his/her legitimate funds while the bank rakes in more profit by way of excessive charges.
Our Banker software ensures that interest and fees are based on agreed rates within the limit of the monetary policies.
COT is one of the major means through which banks overcharge customers especially the high net worth and volume accounts. There are about six classes of transactions exempted from COT charges but most of the banks do otherwise. Sometimes, because of the volume of transactions, you might have negotiated COT rate with your bank. In order to increase their COT earnings, the banks use rate higher than agreed rate without informing customers.
Our Banker software ensures that the COT calculation is as agreed within the limit of the monetary policies.
Credit facilities (overdraft, excess overdraft, finance, lease, etc.) are given to proven customers to facilitate and promote their businesses beyond their financial capabilities. It is mandatory that accounts running on facilities must attract debit interest. In some banks and for some account holders, the stipulated limit does not mean the customer cannot exceed the limit but the amount by which the limit is exceeded (called excess/default) would attract a higher debit interest rate. Contrary to monetary policies, when limit is exceeded some banks calculate interest using excess rate on both limit and excess thereby overcharging the customer on the limit.
Our Banker software ensures interest calculation on facilities (limit and excess) is in accordance with the monetary policies and procedure of interest calculation.
There are fees allowed to be charged on bank facilities. These fees have rules and regulations guiding their applications, computations and frequencies. Most times, some of the banks violate the rules and regulations on fees by applying wrong procedures and frequencies.
Our Banker software eliminates this practice by ensuring that all fees are in line with rules and regulations of lending fees.
BA (Bankers' Acceptance) and CP (Commercial Papers) are instruments used by banks to avail credit facilities to creditworthy customers. Inappropriate BA and CP parameters like interest rates, tenor/duration termination, fees, rollover differentials, etc. could lead to huge amount of overcharge on the account absorbing the fees/charges.
Our Banker software is equipped with the mechanism to generate appropriate parameters for BA and CP charges thereby eliminating all possibilities of overcharge and increasing the profitability of the instruments.
Another major means of overcharge on facility accounts is exchange rates applied on some foreign exchange transactions. Several times, the banks apply unauthorized exchange rates on forex transactions thereby short-changing the customers.
Our Banker software is a multi-currency application and allows transactions in other currencies with appropriate exchange rates at bidding dates.
Backdating of debit transaction is a situation in which a withdrawal is given a value/effective date earlier than the transaction date. An example is when a withdrawal that took place on Friday 10th January, 2003 is said to be effective (i.e. having value date) on Monday 6th January, 2003. Postdating of credit transaction is a situation in which a lodgment is given a value/effective date later than the supposed value date. An example is when a lodgment that took place on the Monday 13th January, 2003 and supposed to have value on 16th January, 2003 is given 20th January, 2003.
The monetary policies states clearing period for every class of transaction thereby enabling customers to determine appropriate value/effective date of their transactions. Backdating/postdating of value dates is another major means of bank overcharge as it imposes undue debit interest on customer and reduces credit interest due to customers.
Our Banker software is equipped with excellent value date generation mechanism with consideration for weekends and holidays thereby detecting overcharge that emanated from wrong value dates.
This is a situation in which a cheque with the same human-interpreted serial number with yours and owned by another customer was debited into your account and account of the owner thereby making an unauthorized withdrawal from your account. This situation is very dangerous when your account is having high confirmation limit and continuous overdraft facility because you may not know when an unknown cheque is withdrawing funds from your account.
Our Banker software has an in-built mechanism to detect unknown cheques.