About three months after BusinessDay reported widespread concerns over billion of naira belonging to customers but trapped in banks’ Automated Teller Machines (ATMs), the Central Bank of Nigeria (CBN) yesterday responded by issuing a 46- day ultimatum for the banks to refund the monies to the affected customers.
The Central Bank of Nigeria ( CBN) warned on Monday that it would begin to sanction Deposit Money Banks (DMBs) which fail to refund to customers monies trapped in their Automated Teller Machines (ATM).
In a circular to the DMBs, the CBN directed the affected banks to return all such monies in their possession, latest by July 31, 2014 or face sanctions.
It would be recalled that the CBN last month gave banks 24 hours to reverse debit entries arising from failed transaction attributable to system-related issues and also destroy ATM cards trapped in their ATM terminals.
The directives were contained in a 14-page ‘Guidelines for card issuance and usage in Nigeria’ released by the CBN Banking and Payment System Department.
“All debit entries arising from failed transactions attributable to system-related issues must be auto-reversed. Where auto reversal is not feasible, manual reversal must be carried out within 24 hours,” it noted in that circular.
But the apex bank in the new circular, noted that despite the earlier directories, its attention had been drawn to the fact some DMBs were still in the habit of not refunding their customers that have been short-changed by the ATMs’ partial or non-dispense error, even after customers’ complaints.
In the circular, Dayo Fatokun, CBN’s Director, Banking and Payments Systems Department said the issue was brought to the notice of heads eBanking, as well as heads of operations at a meeting held on April 15, which had the Card Schemes and Switches present.
BusinessDay had reported on March 28 that several billions of naira was caught up in failed Automated Teller Machine (ATM) transactions across the more than 5,500 branches of Nigeria’s 25 deposit money banks nationwide.
This is causing pain and frustration to many of the country’s 25 million bank customers. The situation arises mostly in cases of cross-bank ATM transactions, with funds of customers trapped due to failed transactions .
The typical scenario is that a customer of bank ‘A’ finds that the nearest ATM to him is that of bank ‘B’. In an attempt to conduct a withdrawal, the customer’s account gets debited without the ATM actually paying. This is usually due to faulty ATM machines or connectivity problems with the switching company.
When the customer goes into the bank that owns the ATM, he or she is asked to go back to the issuing (his own) bank to file a formal complaint. Following the initial interface, the customer is sent back and forth by the affected banks, over and over again for an interminable period.
In many cases, the customer becomes weary and gives up the chase, waiting for an internal solution that takes too long, or never comes at all. This leaves billions of naira in stranded ATM transactions piled up in the banks.
Analysts say banks’ capacity to handle public communications is often questionable. Many customers leave the banking halls feeling short-changed, which has negative impact on the brand, not knowing that it is just a case of poor co-ordination by the banks.
Seeking a way out of this hazard, many ATM users search out their own bank’s ATMs, no matter how far away these may be, because cases of failed transactions, when they occur on a customer’s bank ATM, are usually resolved within 24 hours. Other bank customers still conduct cross-bank ATM transactions but have resorted to collecting the intended sums in bits to avoid huge losses, in case of failed transactions. This, however, leads to time wasting, long queues, greater wear on the ATM machines and higher risk of failed transactions, as explained in the theory of probability and chance.
Many bank customers are also losing confidence in electronic payment systems as a result of slow and inefficient dispute resolution when issues relating to faulty ATM transactions arise.
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