The Central Bank of Nigeria (CBN) cancelled N100 on any remote-on-us withdrawal in 2012, citing the need to encourage people to use the ATM of other banks.
However, the recent announcement of the reintroduction of the charge sparked criticism from some quarters, but the apex bank and the Bankers Committee stated that the decision is in the economic interest of the country, as the removal of the charges had a negative effect on the cashless policy.
They said the wear and tear as well as the frequency of servicing the ATMs had increased significantly since the removal of the charges. Indeed, some customers are beginning to abuse the use of ATMs through countless withdrawals. This development, the apex bank, observed has led to increase in cash transactions, which negates the bank's cashless policy the CBN said in a circular.
According to the CBN if a part of this cost goes unabated, the banks may be forced to reject transactions coming from their customers at other banks' ATMs, thereby frustrating the inter-operability of payment systems.
Maintaining that ATM is expensive and requires economic incentive to maintain, an Economist and Managing Director, Financial Derivatives Company Limited, Mr Bismark Rewane, said the reinstatement of the ATM charge was appropriate.
He said the removal of ATM charges was wrong in the first instance, adding that there was no way a bank can recover its costs and improve its profitability.
For instance, he noted that banks had to pay AMCON levy, NDIC charges and at the same time losing money from COT charges, which were being gradually reduced and would eventually be phased out in the next two years.
"Where do they expect banks to make profits after all these deductions? Don't forget that banks have to invest and reinvest. So, it makes a lot of sense to return the charges for the ATM," Rewane said.
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