Are These ATM Charges Approved By The Central Bank Of Nigeria?

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In recent times, Nigerian banks have been advertising the advantages associated with the use of Automated Teller Machines (ATMs) for sundry banking transactions, especially withdrawals. These ATMs have sprung up wherever there is a bank and in other strategic locations. The banks cajole their customers to apply for the ATM cards.
In some banks, there are notices that customers will pay charges if they make over-the-counter withdrawals of moneys below a specified amount, thus compelling people to use the ATMs. What I do not know is whether the issuance of the ATM card by banks attracts any charge. I have a feeling it does, just as the issuance of a cheque or withdrawal booklet does. According to the banks, the use of ATMs by Nigerians will almost equate us with the citizens of advanced countries which operate a cashless (card) economy. The use of the ATMs, we are told, reduces the incidence of theft which is mostly the bane of persons carrying cash on transit. But this does not eliminate the chances of a robbery attack at the site of the ATM or soon after one may have made a withdrawal therefrom.

The use of ATMs, no doubt, spares one the horror of joining the long queues which are the hallmarks of some Nigerian banks. I went to a bank once around 8am to make withdrawal and succeeded in doing so around 3pm the same day! But with ATMs, one can make withdrawals after banking (office) hours, during weekends and public holidays. A person who has an ATM card and sufficient credit balance in his account would not be anxious to make withdrawal from a bank on a Friday or on a day preceding a public holiday. It is not disputed that the use of ATMs is mutually beneficial to the bank and its customer. The bank is saved the inconvenience of an overcrowded banking hall and overstretched paying cashiers. However, among the snags here are the recurring system breakdowns and inability of ATMs to dispense money which users of ATMs often experience.

Again, an email I received from a London-based friend shows that criminals now plant gadgets which can snap one’s secret number or trap the card during usage of the ATM. In the first case, the rogue will aim at stealing one’s card, having obtained the secret number through his gadget. In the case of a trapped card, the criminal will hang around and offer to help the distressed card-owner retrieve the card. He will ask for the secret number, make bogus attempts at retrieval, and when the card-owner leaves frustrated, he will retrieve the card and clear all the credit in the account. I have not heard of the occurrence of any of such incidences in Nigeria; however, the possibility calls for vigilance on the part of banks and their customers who patronize ATMs. Routine checks should be run on these ATMs for any strange gadgets, while bank customers should be mindful of the time they use the machines and report any complaints thereof to the banks only. Added to these is the necessity for banks to station security men at the site of ATMs on a permanent basis. At present, Nigeria appears unripe for unsecured ATMs.

I now go to the main issue in this write-up. Few years ago, my younger sister opened a savings account with one of the Nigerian new generation banks, at a branch near the University of Nigeria Nsukka. While opening the account, she wrote down my mobile number for contact as she had none then. Ever since, once any transaction occurs on that account, the bank sends a text message to my mobile phone. I will not name the bank, but there are two particular text messages from it which worry me. One of them reads: “Pls use our ATMs as often as u wish coz we have improved our services to serve u better. Every ATM withdrawal is free except the N100 monthly charge. Stay Happy”. What a paradoxical statement! The other text message reads: “Debit Alert! NGN100.00 was debited from your Acct No … on 31–10–2007 … Detail: October 2007 ATM Service Charge”. These text messages suggest that the N100 monthly charge is imposed regardless of the usage or otherwise of the ATM by the customer. I am aware that, currently in Nigeria, the use of an ATM card on the machine of the issuing bank is supposedly free, while every single use on another bank’s machine attracts a flat charge of N100.

My main concern in this piece is the propriety or otherwise of a bank charging its customer(s) for the use of its ATM cards on machines owned and managed by it. Granted that a customer who uses the ATM does himself some good, but it does not justify his extortion by the bank. If a bank charges a customer for the issuance of an ATM card, as is the case with cheque or withdrawal booklets, I do not see any justification for any other periodic charge on the same customer for using the same card, except when used on another bank’s ATM for withdrawal. For a current account, is such a periodic charge not in addition to the usual Commission-On-Transaction (COT) for which bank customers are debited in respect of deposits and withdrawals? If it is, then it is unconscionable, as it amounts to a sort of double jeopardy for the customer. In a savings account, as in my sister’s case, such a charge is hard to swallow. It amounts to getting through the backdoor what is not permissible conventionally in savings account. And it is tantamount to extortion of a hapless customer.

My query is: whether the Central Bank of Nigeria is aware of and approves of these charges imposed by some banks for the use of their ATM cards for transactions on ATMs owned and managed by them? If the answer is in the negative, I urge the CBN to investigate the matter, to know whether it is in addition to the charge for the issuance of the cards and the traditional COTs (in respect of a current account). The banks involved in this should be fished out and warned to desist therefrom. Additionally, the guilty bank(s) should be directed to refund any such deductions or charges to the affected customers.

An ancillary sore point is the flat charge of N100 imposed for the use of one bank’s card on another’s ATM, including minor transactions like account balance inquiry. The imposition of a flat charge for every use of one bank’s card on another’s ATM is as condemnable as the monthly charge of N100 a bank extorts from its customers for using its card on an ATM owned and managed by it. A transaction such as withdrawal should not attract the same charge as an account balance inquiry even when both are made by using one bank’s card on another’s ATM. Contrarily, one does not quarrel with the N100 charge for using one bank’s ATM card on another bank’s machine for withdrawal. It is comparable to paying one bank’s cheque into an account with another bank and, is bound to attract some charges.

Nonetheless, many Nigerian banks, in an unchecked manner, subject their customers to untold and unfathomable charges. These charges in reality are by far higher than what is touted by the banks and are duplicated under different names. It is time the Central Bank of Nigeria (CBN) took a deeper and sterner look in this area to curb the ugly trend and protect the innocent but unfortunate customer.

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