JANUARY 4, 2017 – Although the Christmas celebrations have come and gone, many Nigerians are still recounting the ordeal they passed through at bank branches across the country while trying to withdraw money from Automated Teller Machines (ATMs) to enable them prepare for the festivities.
True, long queues at ATM points and inside banking halls are usually a common sight in the days leading up to the celebrations, but the queues witnessed at bank branches about a week to last year’s Christmas were unprecedented.
New Telegraph gathered that the situation was made worse by the fact that there was a high ATM failure rate with many of the machines either running dry or bearing the “out of service” message.
In fact, on December 23, the last working day before the Christmas weekend, there were chaotic scenes at several bank branches in Lagos as some angry customers who had spent a long time on the queue without being able to access their money, threatened to beat up bank staff that they perceived as being unhelpful.
A vehicle spare parts dealer, Emma Okeke, who was at the Isolo branch of a Tier 11 bank said he spent close to an hour queuing at the branch’s ATMs before he was able to make a withdrawal. He said, “I have never seen such a long ATM line before. The queue was so long that it almost stretched out on the road.
Yet, people are saying that there is a recession and that they don’t have money.
I was lucky I arrived early otherwise I would not have succeeded in withdrawing my money.” Also, another bank customer, Mr. Fred Ndili, who said he spent over an hour in long queues at ATM points of a bank branch in Festac Town, said the situation was made worse because only two out of the four ATMs at the branch were dispensing cash, adding that when he ran out of patience he left the queue and withdrew his money across the counter.
The long ATM queues sparked speculation that there was a liquidity problem in the banking industry thus fuelling widespread anxiety.
However, a top official in the Information Technology (IT) department of a Tier 1 bank, who did not want his name in print, attributed the long queues at ATM points to the inadequate number of ATMs deployed by banks, pointing out that most banks have stopped deploying ATMs to offsite (outside the branch) locations.
He said: “It is not correct to say that there were long queues at the ATMs because banks have liquidity issues.
The fact is that because of the tough times most banks have stopped deploying ATMs to offsite locations so there is a lot of pressure on the machines that are located at their branches.”
He argued that deploying ATMs to offsite locations was a very expensive project which most banks are reluctant to get involved in during this period of recession.
“To deploy an ATM at an offsite location, you will need to get a generator as well as a solar back up. Then of course there is the additional cost of security and arranging to get the machine loaded.
So instead of contending with these challenges banks for now, are only installing ATMs at their branches,” he stated.
Indeed, latest industry report released last August by the Nigeria Inter-Bank Settlement Scheme (NIBSS), showed that the deployment of ATMs by commercial banks in the country is currently in deficit of 72.33 per cent.
According to the NIBSS data, banks have deployed a total of 16,660 ATMs against the required number of 60,000 units of the banking and payment facility pegged by the Central Bank of Nigeria (CBN) thereby leaving a shortfall of 43,340.
The NIBSS industry review up to the end of first quarter of 2016, further showed that while the country’s recorded total number of ATMs in March 2016 stood at 16,660, the total number of active cards was 41.89million while volume and value of ATM transactions for January and March, 2016, stood at N0.12billion and N1.07trillion respectively.
Commenting on the report, the Executive Director, Business Development, NIBSS, Mr Niyi Ajao, said: “The ATM is an important component of the CBN’s cashless policy, an initiative projected to save banks over N200billion cost of processing, handling and managing cash.”
However, industry watchers warn that unless the CBN and banks take steps to ensure that more ATMs are deployed, the objective of the cashless policy could be defeated.
Analysts also point out that a survey on Bank Financial Channels in the country carried out by NOIpolls in 2015 revealed that ATMs were the most visible proceeds of the banking sector reforms to Nigerians.
According to the survey, of all the bank channels, customers used ATMs 68 per cent of the time compared to just six per cent for Internet Banking and 6per cent for Point Of Sale terminals (PoS) respectively, with most customers using the ATMs more than once a week.
It would be recalled that the first phase of the Cashless Policy was launched in Lagos by the CBN in collaboration with the Bankers’ Committee on January 1st 2012.
The policy was aimed at curbing excesses in the handling of cash and promoting the use of electronic payment platforms such as ATMs, PoS terminals, mobile banking and Internet banking.
Assessing the impact of the policy on the industry in an interview with this newspaper, the President of the Bank Customers Association of Nigeria (BCAN), Dr Uju Ogubunka, said it widened the scope of transactions carried out in the financial services industry and the entire economy.
He said: “So many people are now disposed to doing their banking transactions at various levels.
