As the tough times in the banking industry continue to take a toll on profits, some lenders in Nigeria have introduced ingenious ways of ripping off their customers through the implementation of the Central Bank of Nigeria (CBN)’s policy on the N65 Automated Teller Machine (ATM) charge, findings by New Telegraph have revealed.
The CBN and the Bankers’ Committee re-introduced the N65 ATM fee on 1st September, 2014 – almost two years after they had scrapped a N100 ATM charge in December 2012.
They explained then that instead of the N100 per withdrawal charge, customers using other banks’ ATMs would now pay N65 after the third withdrawal from such machines within a month.
According to the Director, Banking and Payment Systems Department, CBN, Mr. Dipo Fatokun, the apex bank and deposit money banks (DMBs) agreed to re-introduce the ATM fee because the cost of trans action was becoming too burdensome for the banks to continue to bear.
However, investigations by this newspaper’s correspondent show that in order to push bank customers into exceeding the three withdrawals in a month from other banks’ ATMs, some lenders now configure their ATMs to dispense not more than N10,000 at every withdrawal for customers who insert ATM cards belonging to other financial institutions into the machines.
It was further gathered that such banks usually carry out this action at weekends when the volume of ATM withdrawals are high. A bank customer at the Okota area of Lagos, Sunday Oyenuga, told this newspaper that although some of his friends had previously told him of this trick by banks, he did not really believe them until he experienced it during the last public holidays.
He said: “I needed to withdraw N40,000, but the only ATM in my area that was dispensing belonged to another bank. I thought I would make two withdrawals of N20,000 each so that I would not fall foul of the N65 rule.
“However, the machine would not dispense until somebody who was on the queue advised that I should enter N10,000 on the machine for each withdrawal. It was only then that I was able to withdraw the N40,000. Of course, I was charged N65 for the fourth withdrawal.”
He explained that while he had formed the habit of making withdrawals from ATMs belonging to the banks he has accounts with so as to avoid the N65 charge and also to prevent the hassles of retrieving his ATM card if it got stuck in the machine, he was compelled to use the ATM he used on the day in question because of the long queues at ATMs that he usually frequents.
His story was corroborated by other bank customers who confirmed that they have had similar experiences like his in the past.
A financial analyst, Mr. James Agu, who also said that he had become used to this particular trick of the banks, stated that it was as a result of this that he goes to great lengths to ensure that he restricts his ATM withdrawals only to machines belonging to his financial institution.
He said that he was aware that some banks also started charging customers the N65 ATM fee even when such customers had not made more than three withdrawals in a month from another bank’s ATM.
According to him, “the banks do this because they know that people are usually too busy to regularly monitor their account balances.
To also ensure that customers don’t check their balance, some banks deliberately delay sending debit alerts for ATM withdrawals until several hours after the transaction occurred and the customer would have probably forgotten to check from which particular ATM he made withdrawals from on that day.”
Interestingly, a source at a mid-sized bank, who did not want to be named, admitted that some lenders were guilty of the allegations, arguing that it was their own way of trying to cope with the tough times in the industry.
He said: “I can’t deny that banks are guilty of the allegations. It is another way that banks can encourage their customers to, as much as possible, restrict their ATM transactions to machines that they (banks) own.
For instance, our customers that use our ATMs can withdraw N20,000 and above at each withdrawal.”
Further defending the banks’ action, the source pointed out that the CBN reduced the income that banks were getting from ATMs when, in its latest guide to bank charges, it reduced card maintenance fee from N100 to N50.
It would be recalled that in a chat with reporters last year, the President of the Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, complained about the implementation of the N65 ATM charge, citing rising complaints by users of ATMs who were charged N65 even when they did not use other banks’ ATMs beyond three times in a month. He rejected the argument that banks were responding to the harsh business environment occasioned by the tough economy.
He said: “CBN ought to know that banks and other economic entities are operating within the same environment and what affects one affects the others. It will be improper and unfair to short-change one against the other in the guise of maintaining viability and stability of the banking system.”
Ogubunka called for the stoppage of the implementation of the policy and immediate refund of all previously taken fees. However, the CBN insists the policy was necessary to ensure that ATMs continue to function across the country to the satisfaction of all bank customers.
Explaining the rationale for the policy, CBN Director, Fatokun, noted that the reintroduction of the ATM charge was to cover the remuneration of the switches, ATM monitoring and fit-notes processing by acquiring banks.
He said the new charge would help banks to improve on the ATM service delivery and ultimately put an end to the frequent malfunctioning and breakdown of the ATMS.