Revealed: See How Banks Extort Customers with Exorbitant ATM Charges
Many Nigerian banks are exploiting customers who make withdrawals using the Automated Teller Machines (ATMs) by deliberately fixing a maximum single withdrawal limit to cleverly circumvent the weak Central Bank of Nigeria (CBN) policy against excessive charges, investigations have revealed.
Remember that in September 2014, the CBN re-introduced the Remote-On-Us fee to discourage abuse of the banking technology through numerous daily withdrawals, the reason was simply to reduce the amount of money in circulation so as not to negate the apex bank ’s cashless policy. The Remote-On-Us, a fee of N65, is charged when a bank customer makes a withdrawal from the ATM of a bank of which he/she is not a customer.
It was first introduced in 2012 when the CBN, in collaboration with the Bankers’ Committee, made it the responsibility of a customer’s bank to pay N100 as Remote-On-Us Fee if such a customer uses the ATM of another bank. The N65 charge, according to the CBN, is only applicable after three transactions at the machine of the bank that is not the cash issuer.
Investigations, however, gathered from customers that most banks start charging from the first operation when a non-customer uses their machines.
Before now, all ATMs had the capacity to dispense N40, 000 in a single withdrawal, if a customer was carrying out the transaction with the card issued by his/her bank, while a maximum of N20,000 could be withdrawn at once if a card issued by another bank was being used.
While this is still in practice in some banks like Access Bank, Standard Chartered Bank and Diamond Bank, many other banks have re-configured their machines to dispense lower amounts, thereby deducting off N65 on each transaction, especially from users withdrawing sizeable sums.
First City Monument Bank (FCMB) ATMs, for instance, dispense N15, 000 to non-customers and N20, 000 to their customers. As a result, customers of other banks who make withdrawals of a naira higher than the set limit on FCMB machines are charged twice!
When queried on why its machines have a lower single transaction limit, which means more charges, especially to non-FCMB customers, the bank’s Head of Media Relations, Louis Ibe, said it is a cash management strategy.
“The decision on the limit from other banks’ cards is to manage our cash supply so that our customers are given more access to cash,” Ibe said.
While this appears sincere in purpose, further investigations revealed that some of the machines dispense lower than N15,000 to non-FCMB customers.
The FCMB machine on Isaac John, Ikeja GRA, Lagos, for example, has a single withdrawal limit of N10,000. Similarly, Fidelity, Skye and Ecobank have their cash machines programmed not to exceed the same amount in a single withdrawal.
A banker, who asked not to be mentioned, said banks programme to have low single withdrawal limits, so they could increase the number of times they charge N65 for use of ATMs.
“Banks are in the business to make money and they maximize every opportunity to make a profit. I know for a fact that the machines are programmed to dispense N10, 000 or even less because I am in the department in charge of ATM in my branch.
“In some locations like markets, the machines are programmed to dispense as low as N5, 000. If you ask the banks, they would tell you it is to control the way people use the ATM or cash in circulation. Whatever reason they give, the truth is they only want to make profit,” he said before jokingly adding, “you can’t blame them; that is how I get paid.”
A United Bank of Africa (UBA) customer also complained bitterly about how she once had to withdraw a large sum from an Ecobank ATM that has been programmed not to dispense more than N5,000 at once.
“I ran out of cash while buying goods, so I went to the Oceanic Bank machine (Ecobank bought over Oceanic Bank in 2014) to withdraw money. I could not withdraw N10,000. I could only withdraw N5,000 at once and I was being charged N65 on each transaction,” she said with barely disguised displeasure.
Similarly, a visit to Skye Bank ATMs around Berger (Ojodu), Ikeja and Victoria Island, showed that all have N10, 000 as maximum single withdrawal limit.
Each attempt on the machines resulted in the automated response: “Maximum amount exceeded. Please re-enter an amount less than NGN 10,000”.
However, the bank insisted that its machines could dispense as much as N40, 000 at a go to its customers.
“The daily limit of a customer is set on the card and such is set by the customer’s bank. Skye Bank cannot determine the daily limit and count of a customer of another bank,” Rasheed Bolarinwa, the bank’s Head of Corporate Communications, told newsmen
A Stanbic Chartered Bank customer told this website that he cannot withdraw N40, 000 at once because the maximum limit is N20, 000.
“When I use a Stanbic card on other banks’ machines, some dispense N10,000, others N15,000. If I am making a withdrawal of N100,000, it means N65 will be charged on each transaction. The government should look into this and provide a solution,” he said.
A First Bank customer equally complained about the cash volume available in a single transaction. While stating that the machine indicates the possibility of N40,000 withdrawal at once, the limit is actually N20,000. His experience with the machines of other banks is similar.
“If one is using other banks’ machines, they also have limits, with some being as low as 10,000,” he said.
He narrated his experience when he used an ATM in Akure, Ondo State. According to him, he wanted to withdraw N15,000 from the ATM of a bank, but his request was rejected until he reduced it to N10,000.
“I felt bad. There is a regulation that if one does more than three operations, you pay on subsequent transactions.
Most banks don’t comply with the regulation.
Don’t blame us -Banks…
Banks, however, refuted the claims, according to a staff of Ecobank, who pleaded anonymity, he revealed that the withdrawal limits on machines are sometimes imposed by the denomination of notes fed into them. And that the Banks had to set a withdrawal limit to prevent the machine from jamming, which occurred as a result of excessive withdrawal.
“There are some machines that dispense N20, 000. That means they have been loaded with N1000 notes and can dispense a maximum of 20 notes at once. But for machines that dispense N500 notes, it means the maximum possible is N10, 000,” he explained.
Blame the CBN
An Operations Manager of a new generation bank insisted that the banks are not breaking any rule, as there is none prescribing single withdrawal limits. He blamed the situation on the CBN, which he said has not made a rule on it.
“The banks are free to set whatever limits they desire; they are not breaking any rules. There is no CBN law that says they cannot set a N10, 000-limit or even lower. If CBN gives a directive on what should be dispensed, the banks will obey. But in the absence of such, you cannot blame the banks but the regulator,” he told SaharaReporters.
Efforts to reach the CBN spokesperson, Isaac Okoroafor, were unsuccessful. As his mobile phone was not answering or returning calls.