Friday, 15 August 2014

We’ve Not Reintroduced ATM Charges - CBN

The Central Bank of Nigeria, CBN, yesterday said it has not reintroduced charges on the use of Automated Teller Machines, ATMs as being speculated.

The Director, Banking & Payments System Department of CBN, Mr. Dipo Fatokun, who explained this to Vanguard  after  his remarks  at the meeting  held  by Nigeria Electronic Fraud Forum in Lagos, said: “It is not a reintroduction per se .

You have to agree with me that when the amendment was made in November 2012, it used to be a N100 for any remote-on-us withdrawal that you did. And you know that the remote-on-us is when you  as a card holder goes to the ATM of a bank other than your bank  to withdraw cash. It was removed then so that people would be encouraged to go to other ATMs without paying for it.

But the truth is that as we said in the circular on the Introduction of Fees on Remote-On-Us ATM Withdrawal Transactions recently, that N100 included the N35 that goes to the issuing bank, which has now been completely waived.  The issuing bank does not make any thing, but in going to other ATMs to make withdrawal , your  bank,  that is, the acquirer bank incurs cost of N65 which they pay to the switches and the owner of the ATM that you are using.

Continuing, he said:  ”Between 2012 and recently when the review was done, it was discovered that people have actually turned ATMs into their personal purses because nothing is charged. Somebody needs  N500, or N1000, he will go to ATM and withdraw, he needs N2000, he will go to ATM and withdraw, so that in a day  some people can patronise  ATM  for  up to four  or ten times.

That has created a huge cost burden for the banks that issue the cards. It was becoming discouraging to them.

“So that is why we said, you can go to an ATM other than your bank ATM to withdraw  up to three times  and no charges would be imposed on you,  but it is when you  make the fourth withdrawal that you will  pay the N65 that  ordinarily your  bank would have paid on your behalf.  But of course if you go to your bank’s ATM, the issuer, for withdrawal you can withdraw as many times as you like without being charged.

 So, it does not discourage financial inclusion. You should bear in mind that when you talk of cashless regime, you are encouraging people to do their transactions electronically other than the use of cash. So it is a motivation for people to patromise the ATM. “


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