₦airaland Forum

Nigerians, we shouldn't wait for things to fall apart. Banks must be called to order and CBN must push more liquidity to the banks as well. There’s no use chasing what is not lost or trying to give the dog a bad name because you want to hang it. Dear citizens, may I approach the court of public opinion to make my case?

From ages past, there have been banks. And there has also always been money - cowrie shells, kudi, owo, gold bars, or bank notes) Without banks and money, what kind of life will this fast paced, commercial driven and transaction reliant society look like?

Ok. So let's ask ourselves, one big question - wetin banks dey do sef? They take your money, keep it as deposits. When you need your money, they give it back to you as cash or transfers. And when you are not using your money, it is used as loans and investment. In all, banks are society’s tool for ensuring that the levers of commerce continue to roll smoothly.

My lords, let’s tackle the big elephant in the room. These days across Nigeria, you find people venting and querying the performance of banking channels, especially the Automated Teller Machine (ATM) in many cities. Many of the rants have been founded on ignorance and mischief, and I will provide concrete evidence on the real state of play and why we are not pointing fingers where they should be. Or do we just like to leave the substance and chase ghosts?

Customers are venting that these ATMs aren’t dispensing cash and that even bank branches don’t have enough cash to give customers. The question is why? I put it to you that this is simply a problem of cash in circulation and cash domiciled in the bank. If a lot of people are refusing to keep their money in the banks because of big bank charges for cash handling and deposits? Need I remind your Lordships that for individual cash deposits, the rate is two percent for transactions above N500,000 while cash withdrawal is three percent for transactions above N500,000. How is this the fault of POS agents? Mark this as Exhibit A.

For Exhibit B, the facts speak for themselves, as banks are no longer interested in maintaining these ATM machines. This is because these services have a very huge cost element to them, especially in terms of transporting cash to them, security, personnel and other costs of maintaining it. Did you know that ATM machines are usually imported into the country and the customs duty on ATMs is over 25%? This, my fellow citizens, is why banks have reduced their investments in them and opted for low maintenance options like mobile banking and USSD.

My last point is a combination of these two factors listed above. Banks have no incentive to push ATM withdrawals when you consider that it is just one among many channels, and probably the most expensive. Banks love money and they are in business to make money. So why would they put cash in an ATM when mobile banking or USSD is there for the customers, at little or no cost of servicing. Also, the total number of ATMs across the country is put at around 22,600 ATM locations across the country. This is grossly insufficient to cater to Nigeria’s huge population that needs financial services.

As I round up my case, there are a few pertinent issues worthy of due cognizance. The government has made many efforts to get Nigerians to embrace a cashless society especially with some of the associated risks like robbery attacks but not much progress has been made. Why doesn't the government use the right policy to encourage digital payments and financial literacy? On the evidence of some of the growth that has been seen, a lot more people are adopting transfers and other forms of payments.

Agency banking is a service. As with all services in the banks, financial institutions and everywhere else, there are service charges to be paid. When people make withdrawals from the ATM and over the counter, and pay the transaction charges, do