Senate’s directive to CBN on ATM card maintenance charges

LAST week, the Senate passed a resolution calling on the Central Bank of Nigeria (CBN) to suspend the excessive ATM card maintenance charges being deducted from customers. Following a motion sponsored by Senator Olugbenga Ashafa (Lagos East, APC) on the illicit and excessive bank charges on customers’ accounts, the Senate also called on commercial banks operating in the country to configure their machines to dispense up to N40,000 per withdrawal pending the outcome of the investigation by the Senate committees tasked with investigating the excessive charges. According to the Senate President, Dr. Bukola Saraki: “This is a motion that affects the life of every Nigerian irrespective of whatever part of the country you come from or whatever political affiliation you have. This is why we are here: to always defend and protect the interests of the Nigerian people. This Senate has done this many times before; when there was a hike in the mobile telecommunication data charges, we intervened and put an end to that. When there were discrepancies and increases in electricity tariff, we also took action.”

The Senate further directed its committees on Banking, Insurance and other Financial Institutions and Finance to conduct an investigation into the propriety of ATM card maintenance charges in comparison with international best practices and report back to the assembly. In addition, it directed the committees to invite the CBN governor, Mr. Godwin Emefiele, to explain why official charges approved by the apex bank were always skewed in favour of the banking institutions and against their customers. Finally, it called on the Consumer Protection Council (CPC) to look into the various complaints of excessive and unnecessary charges by Nigerian banks. Not surprisingly, members of the public  received the directive with gratitude, describing it as a good development for the industry.

By any standards, the Senate’s resolution on ATM card charges is a step in the right direction. If there is any difference between the so-called maintenance fee and the Commission on Turnover (CoT) scrapped years ago, it is yet to be made clear. When the CoT regime came to an end, there was consensus among Nigerians that it was a completely unfair practice that deserved that fate. Little did the public realise that their delight was going to be short-lived. For far too long, bank customers, most of them barely able to survive, have groaned under the yoke of bank charges. The banks send customers alerts for transactions in batches, with debits and commission broken into two. Yet, at the end of the day, the same customers are billed for these transactions.  And what exactly are the banks maintaining in the ATM when customers pay for stolen or expired cards?

More absurdly, the banks send customers birthday and festive wishes, then later bill them for the service. This has reportedly forced some exasperated customers to write their banks formal letters stating that they did not want any SMS on birthdays or festive seasons. Indeed, all the extant bank charges, save for the replacement of ATM cards, amount to extortion of customers. In this connection, we are unimpressed by the argument that the Senate is somehow going beyond its legislative boundary by the directive to the CBN, and that it merely ought to focus on legislation that would improve infrastructure in the country and bring the cost of doing business down. The fact is that such sophistry does not detract from the fact that bank customers are currently being fleeced by the banks as if there is no government in place to check the excesses. In any case, the essence of any government is security of life and property and the promotion of the public good.

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In our previous editorials, we harped on the fact that the consumer protection agencies in the country have carried on like captured regulators. Oftentimes, they acted only after public outcry, giving the impression that they were in cahoots with the businesses they are supposed to regulate to inflict pains on the badly misgoverned and long-suffering populace. In this connection, without prejudice to the fact that it has apparently acquitted itself more creditably than some other regulators in the country, we call on the Consumer Protection Council (CPC) to treat the Senate directive that it should look into the various complaints of excessive and unnecessary charges by Nigerian banks with all the seriousness that it deserves. Pray, in what kind of economy would banks be declaring huge profits when economic indices are consistently poor?

We applaud the Senate’s directive to the CBN on ATM charges and urge the CBN to implement it while taking any other steps deemed necessary to protect the banking public. While banks are in business to make profit, they should not have to do so in ways that cause customers nightmares.