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The recent reintroduction of ATM charges by the Central Bank of Nigeria is not going down well with many bank customers who are demanding for its reversal
By Osaze Omoragbon
In recent times, it has become a pattern of sorts that when a new CBN governor assumes office, he takes earth-shaking decisions that quake the financial sector. Professor Chukuma Soludo’s mandatory bank consolidation exercise and Lamido Sanusi’s sack of banks chief executives lived up to the billing. Following Godwin Emefiele’s assumption of office as CBN governor and the experience they had as a result of various reform policies introduced by his predecessors, financial sector players held their breath during Emefiele’s maiden address to sketch out his vision for the next five years; expecting the worst. Many were relieved and others disappointed.
Nevertheless, the decision of the Bankers’ Committee to reintroduce the ATM charges shocked most observers who thought the charges were gone for good. What could have made the Bankers’ Committee to backtrack on a policy it abolished two years ago and won it admiration?
Bank customers are still at a loss over the recent reintroduction of ATM withdrawal charges. The Bankers’ Committee recently reintroduced the charges after two years hiatus though with modification to the earlier charges. The reintroduced charge has been modified such that ATM withdrawals – from other banks except the issuing bank–no longer attract N100 flat rate but N65 after the third withdrawal in a month from a bank that is not the issuing bank.
Customers are furious as the banks take pains to explain and downplay the significance of the policy reversal. Indeed, the controversy has led to conspiracy theories as some industry watchers compare the CBN leadership under Sanusi with that of the incumbent; trying strenuously to decipher the rationale for the policy reversal even as some experts denounce frequent policy reversals.
Customers who spoke to TheEconomy wondered why the apex bank reintroduced ATM charges which they said was not well-thought-out. “It is obvious this current CBN leadership is in bed with the bankers it is supposed to supervise,” said Mr. Joseph Enabulele, a furious bank customer. If the scrapping of the fee could hold for two years, observers asked what prompted the reintroduction of the fee. “Are the banks suddenly losing profits? Why was it not reversed under Sanusi?.” With mega profits declared yearly, observers are of the view that banks have no excuse for reintroducing the charges let alone the hapless one given by the CBN which leapt to the defense of the banks. “The withdrawal of the ATM charges was forced on the bankers by then CBN governor as a way of banks contributing to financial inclusion drive,” a banker who pleaded anonymity said. According to insiders, the idea was entirely CBN’s but was tagged as a collective decision of the Bankers’ Committee. “The former CBN governor was a radical. He knew what some bank CEOs took home at the end of the year as performance bonuses. It was a small price for them to pay to develop the financial sector,” the source claimed. It is also claimed that the apex bank had forced the banks to reduce their Commission on Turnover (COT) given the low Cash Reserve Ratio (CRR); which the banks frowned at.
A press release by the apex bank defending the decision to reintroduce the fees reads in part: “The CBN has noted some public comments on the (recently reintroduced) charges on extended use of banks’ ATMs. These reactions have been mixed with most commentators showing great understanding and other stakeholders expressing clear lack of understanding of the rationale for this decision of the Bankers’ Committee”. The rationale for the reintroduced charges, according to the apex bank are: to ensure that customers get better services, increase healthy competition among banks, stop abuse of ATM by customers through countless daily withdrawals and defray cost of servicing ATMs due to wear and tear, among other reasons.
However, not everyone buys the reasons advanced by the CBN given the huge profits declared by banks in the last two years. Leading banks such as Zenith Bank Plc, GTBank, First Bank Plc, UBA Plc and Access Bank Plc among others are declaring mega profits. These top banks jointly declared a profit before tax of N409.98billion – more than the combined 2014 budget of Ogun and Edo states – in 2013 as against a profit of N395.84billion in 2012, an increase of N14.14billion in the period under review. “The reasons for the reintroduction of the charges are tenuous,” Mr Favour Chima, a dealer in electronics said. According to him, he patronises the ATM several times a day due to the nature of his business.
Indeed, Nigerians have voiced their disaffection even as some activists plan to protest the charges. “The CBN established the Consumer Protection Department (CPD) for the sake of bank customers,” thundered an activist who is planning to organise a virtual protest. Several online news platforms are carrying out surveys to determine customers’ reception to the charges. The consensus is that banks already make a kill from numerous charges, which burdens customers. This gave birth to the CPD and the reintroduced charges are not in line with customers’ wellbeing.