Why You May Forever Pay More at The ATM

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Rarzack Olaegbe


Some of these have pushed the Central Bank of Nigeria (CBN) to reduce the ATM fees. The fees came down from the almighty N100 to N65. Then from a princely N65 to the lowly N35. This was done to promote financial inclusion. The CBN claimed. The apex bank also capped the number of withdrawals before the fees apply.


Did you pass your driving test? You didn’t pass it? Oh, you didn’t even attend a driving school? I can tell from the weak grin peeping from under your face. Many Nigerians didn’t attend the driving school.

That is one of the reasons so many Nigerians drive like… Well, in the UK, it has been discovered that learners who had their driving tests at an exact time are more likely to pass. Data released by DVSA shows 63 per cent of students who took their tests between 5pm and 6pm on a Monday passed.

Learners who take their driving tests on a certain day are more likely to pass. And Monday is a good day for testing. The record shows a 53 per cent pass rate. But you must avoid certain times and days. After 7pm is bad.

Only 30 percent of learners passed. Friday is bad. About 49 per cent of learners passed on this day. A spokesman for Collingwood Insurance Services, who collected the data, said: “Learners should choose the time and date of their driving test with caution”.

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That is because different times and days of the week have completely different pass rates on average. “After analysing DVSA data for 2021, we found that between 5pm and 6pm on a Monday is the best time to pass your test.”  A previous study found that the best place to pass your driving test was the Welsh coastal town of Pwllheli. 86 per cent of learners passed the test. Of the UK’s 380 driving test centres, the worst pass rate was found to be at Erith, South East London. It has a 32 per cent success rate.

Portrait of young afro woman using credit card

On the one hand

You, too, may not have a success pass rate. That is, if you make cash withdrawals on another bank’s ATM. For the third time. In a month. You will be charged N35 after the third withdrawal in the same month. That is not the reason we have fewer ATMs. In “why banks are removing the ATMs”, I had asked why we have a reduction in the number of active machines. To answer the question, I offered two reasons.

The high maintenance cost of the machine. The machines are expensive to procure. The machines are expensive to service. That is why the banks have not deployed many machines. I had submitted.

But one of the highly influential CEOs in the industry disagreed. He engaged me.  He didn’t quite agree with my position. From his height, he observed that the reason we have fewer ATMs in the system is because of regulatory price control. This has led to the false belief that if we rob Peter we can pay Paul. This erroneous action has activated other mistakes.

Some of these have pushed the Central Bank of Nigeria to reduce the ATM fees. The fees came down from the almighty N100 to N65. Then from a princely N65 to the lowly N35. This was done to promote financial inclusion. The CBN claimed. The apex bank also capped the number of withdrawals before the fees apply.

To the discerning eyes of my CEO friend, that was the day the wahala seed was planted. As you may already have known the banks will not offer you a cup of chilled water without charges. If you don’t pay at the dispense point, you will pay somehow.  Anyway, with that arrangement, the banks do not view the ATM deployment as a profit centre. If it is not a profit centre, why should the banks deploy more ATMs? So that explains why we have fewer ATMs in the system.

A deeper reason is that the CBN has successfully created a monster. The monster is the agent. The agents have exploited the ATM conundrum. The CBN cannot regulate the agents’ pricing. The agents have emerged as the new, silent mafia.

For the agents, it is a business opportunity. With the connivance of the in-house gurus, the mafia have ensured that the ATMs don’t function. Because the ATMs don’t function, you are forced to patronise the agents. So the masses invariably pay more than the initial N100 for cash withdrawal. That explains why you may forever pay more at the ATMs.

Who are the agents?

Bigmummy, I am thinking, please. I will get back to you.

On the other hand

The Reserve Bank of India (RBI) is considering a number of changes. These changes will affect the financial and non-financial transactions as they relate to the ATMs in India. Now, the banks in India have permission to increase the charges. This is contained in a circular signed by P Vasudevan, the Chief General Manager.

A customer will pay 21 rupees (N114.34) if the customer exceeds the monthly limits of the ATM withdrawal. Initially, the ATM charges were 20 rupees. RBI has also imposed the interchange fee charged by the banks for the ATM transactions. This has been increased from 15 to 17 rupees for each financial transaction.

The interchange fee for the non-financial transactions is increased from 5 to 6 rupees.  The bank pays an interchange fee to the operator of the ATM. This applies when a customer makes a transaction at an ATM that does not belong to the card-issuing bank.

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Meanwhile, the RBI will penalise the banks if the ATMs remain out-of-cash. Why? The inconvenience caused to the public due to the non-availability of cash in the machines led the apex bank of India to take this decision. In addition, if the machines fail to dispense cash for more than 10 hours in a month, the bank will face a penalty of 10,000 (N55, 000) rupees per ATM.

Nigerian banks and the economy - Businessday NG

When will the penalty apply?

Bigmummy, when the customer cannot withdraw cash due to non-availability of cash in a particular ATM.

Who will impose the penalty?

The person under whose jurisdiction the ATMs are located.

Can we impose this penalty in Nigeria? It will pepper the banks.

Yes, Bigmummy.

Who will collect the fees?

MC Oluomo.

Who is he?

The person who issued you a driver’s license when you did not pass your test!

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