by Tunji Andrews
The direct implication on the bank customer, who is already being charged for over the counter withdrawals below N20,000, is that he may have to hold on to more cash to avoid having to seek out ATMs. Customers, are however advised to stick to ATMs of their banks if they seek to avoid this reinstatement.
In a step that may be seen as retrogressive to the cashless policy, it has emerged that from September 1, 2014, Banks customers will yet again pay for cash withdrawals made on other banks’ Automated Teller Machines. This step was made known by the Central Bank of Nigeria in a directive released on Wednesday.
Many celebrated the decision by the Bankers’ Committee of the Central Bank of Nigeria, on the 13th of November 2012, when the body approved the immediate removal of the
N100 charge on customers who use the Automated Teller Machines of banks other than theirs. The general idea was that the committee, being urged by the former CBN governor Mallam Sanusi Lamido Sanusi, had agreed to shoulder costs, in a bid to support the cashless policy.
A breakdown of the
N100 charge had been a N35 issuer fee which was waived by banks and has remained so till date; with the N65 going to the third party bank. Both fee are usually shared between both the issuing bank, the third party bank and switch companies.
In continuing this subsidized service, banks having had a mixed year of poor earnings and a huge backlog of bad debts have once again brought up the issue and it would seem that the new leadership of the CBN (Who recently was at the helm of a Nigerian commercial bank) conceded some ground to give some reprieve to banks.
The statement signed by the Director, Banking and Payment Systems Department, CBN, Mr. Dipo Fatokun, said that the central bank and deposit money banks in Nigeria had agreed to re-introduce the ATM charges because the cost of transaction was becoming too burdensome for the banks to continue to bear. The direct implication on the bank customer, who is already being charged for over the counter withdrawals below N20,000, is that he may have to hold on to more cash to avoid having to seek out ATMs. Customers, are however advised to stick to ATMs of their banks if they seek to avoid this reinstatement.
The twist in this reintroduction is that the first three (3) withdrawals from third party ATMS in a month would be overlooked; however, every third party withdrawal after this would then be charged at what stakeholders are referring to as a ‘token fee’.
Fatokun in this statement said, “The CBN hereby issues the following directives: The re-introduction of ‘Remote-on-us’ ATM cash withdrawal transaction fee, which will now be N65 per transaction, to cover the remuneration of switches, ATM monitoring and fit-notes processing by acquiring banks; the new charge shall apply as from the fourth ‘Remote-on-us’ withdrawal (in a month) by a cardholder, thereby making the first three ‘Remote on us’ transaction free for the cardholder, but to the paid by the issuing bank. September 1, 2014 shall be the effective date for the implementation of the new charge; banks are expected to conduct adequate sensitisation to the customers on the introduction of the new fee; all ATM cash withdrawals on the ATM of issuing banks shall be at no cost to the cardholder.”
He also said, “However, as a result of the unintended consequences of the decision, which has resulted in substantial cost burden incurred by banks in defraying the cost of the service, the payment structure for card carrying bank customers is hereby reviewed in line with present realities.”