Effective September 1, bank customers are to pay N65 per ATM withdrawal after three transactions from an ATM not belonging to an issuer bank. According to CBN, the reintroduction is to ‘cushion’ the effects of operational cost being incurred by the banks. This can be a valid reason depending on which side of the curve you belong.
I have decided to ask some fundamental questions? 1- How has this operational cost affected the performance or gross earnings of the banks? 2- To what extent would the reintroduction minimize the ill-defined ‘operational cost’ in the long run? Going through the annual reports of major banks in Nigeria in the last four years, I found to my surprise that these so-called banks suffering from the virus called ‘operational cost’ have continuously recorded huge gross earnings. In 2012, GT bank was tagged Nigeria’s largest bank with market capitalization when it recorded gross earnings of N154 billion.
In 2010, First Bank recorded gross earnings of N232b; these 2011 stood at N274b and N360b in 2012. In 2011, Godwin Emefiele successfully steered Zenith Bank to gross earnings of N244b; in 2012 this was N307b, in that same year it recorded N101billion (profit after tax). The logical question to be asked is: since the earlier removal of the N100 ATM charges was removed, how has it affected our banks?
Are they now on the verge of collapse? The reintroduction of ATM charges is purely not based on monetary stability, regulatory efficiency or economic rationality. Hence this is a capitalist agenda which would further widen the gap between the haves and have-nots. Are these the legacies we expect the CBN Governor to take from his predecessor? Some few weeks back, I applied for an ATM card and I incurred N1000 charge, which is normal, but to my surprise, I got a debit alert of N50 for VAT on ATM card, which was indeed a shocking surprise.
We now live in a situation where we undergo VAT on regular charges in our banks. Am sure the bank would now charge us VAT on using their deposit slips or even standing in a queue!
Sanni Muhammed Ozovehe,
Abuja
