CBN ORDERS BANK TO REMOVE THEIR OFF PREMISES ATMs

The Central Bank of Nigeria has directed that all ATM machines located at the premises other than bank locations should be removed before June 30, 2009. The CBN’s directive is to curtail the banks competition for public space. The release by James Olenkah, CBN Director of Banking Operations, further reiterates that ATM Consortium is the sole entirety mandated to deploy off premises ATMs, and that the apex bank intends to license another entirety in the near future.

CBN has given this directive to encourage resourse sharing and has mandated the ATM consortium to take responsibility of the off premise deployments. Some of these consortiums have failed in meeting up targets prior to banks involvement.

Analysts and experts have been emphasizing the implications of this directive.

First, it is very clear that if this directive should take place, the banking halls formerly rid of many people will be filled to the brim. This in itself is a nuisance and does not ensure a security tight financial environment nor does it speak well of a corporate environment.

Secondly, the tellers will have more jobs to do as the crowded ATMs will drive some people to accept cash on counter than wait for the cue. This in itself means that it is not a cost effective system.

From the consumer point of view, this move will represent a reversal of fortunes in terms of convenience. Now the customer must find a physical bank premise to utilize an ATM machine. Chances are that the nearest bank will not be their own bank, meaning they will incur an extra fee for using the ATM machines.

From the telecommunications perspective, it has the potential of reducing the demand pool for bandwidth, making broadband investments less predictable.

Most critically the dynamic pace of economic activities will be reduced significantly. A shortfall of cash at hotels or airports could spell disaster if a physical branch equipped with a loaded ATM is not within proximity. People may revert to carrying of cash than is needed, with its attendant security risks. This stymies the development of an e-economy and cannot possibly be a response to the reasons advanced by the CBN.

They have suggested that CBN review its directive which some think will only benefit a few persons.