Just 22 months after cancelling the previous N100 charges on Automated Teller Machines (ATM) transactions, the Central Bank of Nigeria (CBN) in a recent circular reintroduced ATM withdrawal charges on “remote-on-us” transactions (transactions carried out by a customer using his/her ATM on another bank’s ATM machine) starting from September 1 2014.
Obviously a policy somersault, the Bank has tried convincing the public as regards the necessity for the recent re-introduction. The Bank has reassured Nigerians that this move does not affect the cashless policy or the financial inclusion drives which entails embracing the non-banked population into the banking population. We were also told by the CBN that as a result of the status quo ante, a lot of bank customers abused the use of ATMs by withdrawing at different ATM spots.
In the circular, the CBN stated that this charge “shall apply as from the 4th “remote-on-us” withdrawal (in a month) by a card holder, thereby making the first three transactions free for the card holder, but to be paid for by the issuing bank”. The CBN also cited substantial cost burdens borne by the banks hitherto the new policy and the fact that the fee would stimulate healthy rivalry among banks.
When in 2012 the CBN announced the removal of the previous charge of N100, the First Bank MD at the Bankers’ Committee explained that; “At present when you use the ATM of a bank other than your own bank, there is a charge of N100, which is borne by the account holder. We have decided that we will work out the modalities and ensure that with immediate effect, we would pass on the cost to the respective banks, which would bear the cost of this service. No matter where you are drawing your money from, you would not be subjected to any charge for using the ATMs”.
He also stated that this step was a form of ‘Corporate Social Responsibility’ to Nigerians because as it is done globally, such fees are not charged in most parts of the world. Despite this initial removal, some banks introduced a N100 monthly ATM ‘maintenance’ fee until the CBN waved in the next year.
It is too much of a coincidence that prior to the previous cancellation in 2012, this N65 ATM withdrawal charge was exactly the same amount charged by Zenith Bank, the commercial bank the CBN governor headed before ascending to his current position. It has even fuelled the predictions of some analysts that the tenure under the present governor may be capitalist or bourgeoisie-friendly in nature.
The clause of the first three remote-on-us withdrawal in a month being free give the impression of a Greek gift to appease the ‘gods’. Presently, most banks allow a maximum withdrawal of N20,000 per transaction hence, an individual who intended to withdraw N100,000 today would have used up this ‘largesse’ leading to a transaction cost of at least, N130 on his/her money.
Some banks have never been ‘interested’ in the deployment of ATMs leading to other banks with a wider network being the recipient of numerous requests of consumers- this leads to an imbalanced ratio of ATM centres to the bank’s customer base.
On the other hand, Nigerians especially in non-commercial cities that travel far distances just to access ATMs who will suffer these charges; this is not forgetting students, corps members etc or the semi-literate/literate who have always been weary of using banks. The cost of withdrawals as a result of this policy would turn the average Nigerian to think twice before embarking on some transactions and instead of encouraging financial inclusion, we would have more pressure on banks (going back to the days of old) as customers would want to avoid paying this penalty.
This policy does not seem to be ‘giving back to the society’ to this strata of society who are trying to make ends meet. It only has the smell of a profit-drive and an aid to commercial banks in engaging in old ways of ‘making money’ via such charges rather than investing in profitable ventures to earn appreciable return on investments.
What we need at this stage is not financial discrimination but financial integration; if in 2012, the CBN took one step forward in line with global best practices and the ‘charitable’ outlook to give back to the society, why take some steps backward by taking back from us all in the name of burdening costs or so-called ‘abusers of privileges’?
The CBN should concentrate on the commercial Banks improving the quality of service offered to Nigerian consumers when transacting with their monies. Other control measures can be put in place to limit individuals who withdraw incessantly other than the service charge. It is hoped that we toe the line of ‘global standards’ and one day, Nigerians will begin to ‘smile to the bank’.
MUSTAFA YUSUF-ADEBOLA
