THE re-activated charge on Automated Teller Machine (ATM) cash withdrawal portends serious threat to cashless society. Ahead of its implementation tomorrow, Nigerians have taken to social media to vent their annoyance, vowing to adopt legitimate means, including bank hall queue protest, to resist the charge.
Last week, depositors told The Guardian that the new charge would increase the burden of banking. They said the return of ATM charge was another means of pauperising the public to enrich banks.
The Central Bank of
"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 be paid by the issuing bank," stated the statement.
In the past two weeks, banks have been sending short message service (SMS) to their customers, reinforcing the new policy that withdrawal over three times per month on other banks' ATM would attract N65 fee.
The charge, which resurfaces about 18 months after a similar fee was terminated by the Bankers' Committee, does not go down well with depositors, who feel they are already paying too much for banking services.
And the fact that banks do not reciprocate the gesture of their customers increases the burden of new charges on depositors, said
Another customer, Alexander Osogbo, an estate consultant, said the fee was an open invitation to chaos, noting that many people, who are disappointed at bank's profiteering attitude, would resort to across-the-counter withdrawal. According to him, some would embark on the old practice for two reasons: to protest the charge and to evade the fee when their banks do not dispense cash.
Indeed, the cancellation of the N100 charge in 2013 gave customers the opportunity to use the closest ATM machine at no cost. The era brought with it the real merit of ATM: convenience. A holder could bypass his bank to use an ATM of another operator if it was more convenient.
Card users say the N65 charge will bring back the inconvenience associated with selective usage. Peter Akhu, a student, said the essence of ATM service was defeated when depositors could not walk into any bank to make withdrawal without "being penalised.
Among bankers, the re-emergence of the ATM charge is not just a giveback. It is a cheerful overture from
At the twilight of
He noted that a CBN governor with background in banking would easily compromise to exploitative desires of former colleagues, whereas, a non-banker economist would keep open mind.
And because of the narrowing of the office on the wellbeing of banks, Dr.
With Emefiele's objective appearing to be twisted in favour of banking sector, his primary 'constituency', these arguments are still relevant. As banks go for the free meal, Nigerians are asking for the head of their 'benefactor'. They want Emefiele to bow out honourably before he would compound their woes.
"Less than three months into his tenure, Emefiele has 'helped' banks to expand their income horizon, albeit trickishly and at the expense of depositors," Akhu said.
Apart from the ATM charge imposition, Charge on Turnover (COT), which was to be phased out completely before the end of the year, seems to have come to stay. At least, banks are not sure it is feasible. A top official, who spoke on the matter, said his bank had envisaged a complete cancellation of COT "by end of third quarter of this year, which does not look achievable."
In fact, bank charges keep growing even though cost of operations is going down due to technological advancement. The operators have also devised means of extorting customers who opt for electronic payment.
Before the return of ATM cash withdrawal charge, banks had maintained charges on money transfer using the window. Retail ATM interbank transfer attracts N100, a charge many customers have condemned as extortionist.
Similarly, customers who opt for other transfer modes are charged accordingly. All fund transfers attract COT at origin banks, except where the account is current, where transfer charges will amount to double COT. By implication, every account is charged COT where fund transfer becomes a regular transaction. Some banks charge as much as N3 per mille while others deduct N2. Besides COT, transfer also attracts handling charges, which varies from bank to bank.
Many customers say they would rather resort to cash to avoid the penalties imposed on transfer. A customer said it was unfortunate that those who opt for "money wiring in line with the cashless policy campaign pay more charges than others who stick to the old culture. How do you convince me to do transfer when there are charges to pay?
"Meanwhile, I can as well withdrawal and walk to the destination bank to deposit without incurring additional charges. The charges may sound small but if you do it daily you would be paying huge amount to banks at the end of the month."
Strangely, a customer does not have to keep his account active to incur the outlandish charges; dormant accounts are affected too.
"Sometimes I would get alert explaining that a few naira were debited as management charges. The next it would be SMS charges. I never really bothered to confront the bank because it was ridiculously small to warrant complaint. How could I walk into a bank to demand explanation on why N12 was debited from my account? The strange charges and SMS continued. Some months I would receive three SMS."
But George was amazed how the kobo-kobo shortfall transformed into a loss that could buy him a decent lunch when he approached a local branch of the bank to reactivate the account in December. Not even the N1000 he deposited to fulfill the renewal ritual filled the hole the unlawful charges created.
"Immediately I walked out of the banking hall, I got alert that my account was credited with N1000 while my balance stood at less than N700. What it meant was that my account was already in deficit. But how could I have known when I never paid attention to the multiple text messages I receive from them on weekly basis."
George walked away without collecting a N50 balance from a grocery shop, not because he really wants to be charitable, but for want of courage to ask for his due. And considering the unruffled disposition of banking environment, many just surrender to the unwarranted 'generosity' while the operators cash in to pile up profits.
Much as the public are not asking questions, bankers are also not willing to scale down their charges. And as much as they can possibly cover, they invent new ones. Interestingly, the few ethical bankers see the whacky practice of imposing a charge on every naira left in bank's vault as criminal, and unprofessional.
A top officer in the audit department of a second-generation bank admitted that the charges appear to keep multiplying now that COT is being phased out. He said banks have faced Herculean task achieving moderate cost-to-income ratio since the charges on inter-bank automated teller machine (ATM) transaction was stopped last year.
"A bank charge is illegal if it is contrary to extant laws and regulation, particularly the guide to bank charges. The guide is a compendium of allowable bank charges issued by the CBN in
"The CBN is aware of these complaints through petitions received by the
He explained that a dormant account should not attract COT or VAT because both are activity-based charges, adding that management charge on dormant account is not covered by extant laws and regulation.
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