The Central Bank of Nigeria (CBN) has said that as the increase in transaction fees involving Automated Teller Machines takes effect from March 1, banks must ensure that their customers have access to cash at their ATM.

The Acting Director, Financial Policy and Regulation Department, John Onoja, made this known on Tuesday when he appeared on Arise TV.

The apex bank had a few days ago issued a directive on ATM transactions to make withdrawals from one’s bank ATMs free of charge.

However, customers using ATMs of other banks will be subjected to a charge of N100 per withdrawal of N20,000 or less at on-site ATMs, which are located within or directly affiliated with a bank branch.

CBN also directed that Off-site ATMs, which are positioned outside bank premises such as shopping malls, fuel stations, and other public spaces, will attract an additional surcharge of up to N500 per transaction.

On international ATM withdrawals, customers will bear the exact fee applied by the international acquirer.

Defending the directive, Onoja said the CBN decided because of the rising operational cost.

He said, “It’s also one side on the part of the financial institution, so that they’ll be able to also keep up with the cost of doing business and then offer value services to the customers, and also on the side of the customer, it is to be sure that they’re going to have very quality service and value-added services from their bankers.”

Onoja also dismissed the speculations that the directive is an attempt to mop up excess cash in circulation.

He said, “There are professional ways of dealing with excess liquidity in this system in Nigeria. The CBN, as the apex monetary policy body in Nigeria, has different tools to deal with that. So, if it is to reduce cash in circulation as a result of inflation and all of that. I’m sure the Central Bank has better tools to use and is not going through the ATM issues. So, it is not in any way to reduce money in circulation. Rather, it is to even make the money available to those who need it. We all know that the other channels that are available to customers and those who do business to transact, the electronic channels, are there. It’s important to ensure those who are especially in the remote areas, those who come to the ATMs and don’t find cash, are assured that banks provide cash at the ATMs so that you, as a customer, can go to the machine and get cash. It’s in no way an attempt to reduce cash.

“Cashless does not mean no cash; just like you said, it is relying less on cash and using other ways, other means of transaction business. We know that you can use your cards on merchant PoS to make purchases. You can use that to make payments in almost all transactions and wherever you think you need payment. But that does not cancel the fact that some persons may need the raw cash in their pocket, and so the ATM is available for you to be able to have that access to cash. I’ve seen on two or three occasions in the past few days that the Central Bank of Nigeria is concerned with access to cash, and because of that, they are working assiduously. They want to ensure that Nigerians are not denied access to legitimate cash where it is needed. Because of that, there is a committee working on access to cash policy and ensuring that when Nigerians need cash, especially those who will need cash at the remote level, or those who need cash in places where, because of technology, they don’t have access to using other things and other channels of payment, they will have cash in their pocket.”

He said with the new directive, banks must ensure that their ATMs have cash for customers.

He said, “Central Bank of Nigeria is not deploying ATMs because we do not have retail customers like individuals, as it were, so the ATMs are outlets to make a value available to their customers to be able to have access to cash. The over-the-counter position is there, but not everybody will need to go to the banking hall to be able to get cash, especially when the volume is very small. And so, it is the responsibility of the commercial banks to deploy outlets where their customers will be able to access cash when they need it, and if the machines are not available to their customers, that is where their customers will need to use the machines provided by other banks, and that is where the issue of paying 100 naira, as the case may be, will come in. So, the banks are challenged in their business environment to ensure that their customers do not want to pay extra for using competitors’ ATMs, in which case it means a lot to their business plan. Commercial banks have the responsibility to provide outlets through the ATM.”


ASA