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CBN’s directive on off-site ATMs dips banks’ fortunes



…As banks pass burden to customers
Revenues to banks’ vaults have continued to nosedive following withdrawal of Automated Teller Machines (ATMs) from off-site locations, as directed by the Central Bank of Nigeria (CBN). Besides, the hope of some industry operators that the CBN would yet again extend the deadline for withdrawal which expired March 31, has been dashed, as the apex bank declared, “there is no going back.”
Meanwhile, the development is impacting negatively on the finances of banks, which have decided to resort to commissions from the self service machines following their aversion to credit as a result of clean up which has heightened major flaws in their risk management.
In fact, revenues from the transactions have been experiencing improvement despite complaints from customers who have lost their life savings to fraudsters. However, some of the affected customers had always alleged insider information. For instance, from a total revenue of N99.6 million in November last year, it moved to N108.3 million in December, but nosedived to N90 million in January this year. An unconfirmed source put the revenue in March at about N100 million
As a way out, some banks have decided to pass the burden to their customers. For instance, last week, one of the banks sent a text message to its customers saying, “Dear customers, CBN mandated non branch ATMs to be handed to a Trust. So all transactions outside …branch ATMs will cost N100 from 9/4/10”). Before now, card users, whose accounts are domiciled with the banks, were not charged for using off-site ATMs, but only paid when they used other banks’ ATMs. But the situation has changed as banks are now exploring survival means in the face of depleting revenue, occasioned by lack of intermediation businesses.
But the CBN insisted last week that it will not rescind its directive that all off-site located ATMs be withdrawn or handed over to independent handlers, saying its action is based on the need to protect the customers and also maintain sanity in the system. According to Mohammed Abdullahi, CBN spokesperson, “CBN is not considering a rethink as this is the best practice worldwide. The essence is to ensure checks and balances in the operations of the ATMs”. According to him, there were occasions in the past where some fraudulent practices, involving customers losing thousands of cash through ATMs were allegedly linked to insider information or collusion with staff of banks.
Mitchell Elegbe, chief executive officer, Interswitch Limited pointed out last week that the management of off-site ATMs was not the responsibility of banks, adding that CBN’s directive on offsite ATMs was laudable. He however added that improper execution on the part of the newly licensed Independent ATM Deployers (IADs) could discredit the policy and further create disorder in the e-payment industry.


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