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CBN explains why banks may reject third-party ATM cards

By on August 22, 2014

The Central Bank of Nigeria on Wednesday said Deposit Money Banks might be forced to reject Automated Teller Machine transactions other than theirs if customers failed to accept the N65 ATM service charge it recently re-introduced.

The central bank had come under severe criticism over the reintroduction of the ATM charge last week, two years after it abolished the N100 fee per withdrawal on third-party ATMs.

It noted that customers using other banks’ ATMs would from September 1, 2014, pay N65 fee on the fourth of such transaction within a month.

The CBN said the cost of maintaining the ATMs was too much for the banks to bear and this formed part of the reasons why it, in collaboration with the Bankers’ Committee, reintroduced the charge on bank customers.

The Director of Corporate Communications, CBN, Mr. Ibrahim Mu’azu, explained in a statement that the new charge would help the banks to keep more ATMs serviceable across the country, thereby making banking more convenient for customers.

He added that the N100 was never removed, but was only transferred to customers’ bank to pay.

“Maintaining ATM is expensive and it requires economic incentive for the owners to deploy and maintain these machines. If a part of this cost goes unabated, the banks may be forced to reject transactions coming from their customers at another bank’s ATMs, thereby frustrating the interoperability of the payment systems,” he said.

Mu’azu maintained that the new charge was not intended to discourage financial inclusion, adding that the CBN would not endorse any anti-customer policy.

“Charging of fees on interbank networks is a widely acceptable practice globally,” he stated

According to him, the new ATM charge will ensure that customers get better services, while increasing healthy competition among the banks.

The CBN director also claimed that transaction volumes at other banks’ ATM had increased astronomically owing to what he described as “free cash withdrawal” on other banks’ ATMs.

Consequently, Mu’azu said the development had made the wear and tear as well as the frequency of servicing the ATMs to increase significantly.

“Indeed, some customers were beginning to abuse the use of ATMs through countless daily withdrawals; this development has led to an increase in cash transactions, which negate the central bank’s cash-less policy,” he said.

“The CBN wishes, therefore, to reassure the public that the long-term interests and welfare of all bank customers remain the goal of all banking policies,” he added.

[Punch]

4 Comments

  1. Otunba

    August 22, 2014 at 6:48 am

    I don’t agree with mu’azu’s explanation. Why should I pay for the servicing of the banks ATM? If these charges are so vitally needed, why was it scrapped in the sanusi administration? Or are they saying sanusi was stupid to remove the charges. And what does he mean by “customers abuse…”, for crying our loud, it’s my money. If I have a need everyday to get cash, I should be free to do so…
    This is just a funny policy. Why should it be the customers money that the banks would rely on to put up and maintain an ATM machine?

    • friendly

      August 22, 2014 at 7:28 am

      Zenith bank is expensive and this man is bringing back bringing all those zenith hidden charges here,it’s your money and should be free to whatever u want with it

  2. chris

    August 22, 2014 at 8:01 am

    Fraudulent leaders have come the ATM machine was introduced to reduce the influx of customers in the bank the #100 naira was cancelled in sanusi administration because he saw as exploitation of the masses money the it is the duty of the bank to maintain their machine for effective banking and services why is it d customers money they want use to repair the machine? Besides every bank collect #1000 for every ATM theory produce even some bank collect #100 for monthly maintenance. Any bank who cannot maintain their ATM machine should be sanction until it services are improved .so, customer are not the one to pay for ATM services and that #65 naira should not be introduce .

  3. James

    August 25, 2014 at 1:25 pm

    Our nation cannot grow when people in position of authority like baking system are using dubious means to dupe the populace. CBN needs to understand that money is actually the blood of the owner. If anyone tries taking it in a dubious manner from the owner, the blood of the owner will speak and that’s one of the reason why we have problems in this country.