The implementation of a N65 charge on remote-on-us ATM withdrawals which was recently announced by the Central Bank of Nigeria commenced on Monday. According to the CBN, this charge shall apply from the fourth remote-on-us withdrawal in a month by a cardholder which means that the first three remote-on-us withdrawal transactions are free.
The charges on remote-on-us withdrawals before the alteration made in December 2012 used to be N100 but this was removed to encourage people to use the ATMs. Now transaction volumes at other banks’ ATM have increased astronomically due to the free cash withdrawal at ATMs, CBN explained.
“The wear and tear as well as the frequency of servicing the ATMs has increased significantly. Indeed, some customers were beginning to abuse the use of ATMs through countless withdrawals. This development has led to increase in cash transactions, which negates the bank’s cashless policy,” the CBN argued.
The Central Bank says that this new policy will engender competition among banks and would ensure that customers get better services from banks. While bank customers are not too happy with this development, the banking sector regulator declared that maintaining ATMs is expensive and that it requires economic incentive for owners to deploy and maintain the facility.
The Deputy Managing Director, Diamond Bank Plc, Mr. Uzoma Dozie said the decision was taken because of the removal of the charges on withdrawals from other banks’ ATMs in 2012, which resulted in large amounts of pressure being put on the ATMs, primarily by customers withdrawing very little amount of money. He continued, “The justification for the policy is to drive people to use other channels such as mobile money, internet banking and POS.”