CBN’s order on ATMs

When a customer uses another bank’s ATM, the reversal must not exceed 48 hours. Automated reversals for ‘on-us’ transactions should be done within five minutes while ‘not-on-us’ transactions should be resolved in less than 15 minutes with functional ATMs.

The order equally gives directives about the issues of biometrics mismatch errors. There must be an immediate fallback to non-biometric verification where it is considered safe.

We commend the CBN for these broad guidelines to banks and card issuers at a time digital finance and cyber risks are on the rise. Customers in the Nigerian financial sector have had to battle with a lot of inefficiencies in ATM operations despite several guidelines from the apex bank.

The global financial ecosystem has become very sensitive and risk-prone. The regulator bank must, beyond the orders, be serious on monitoring and evaluation in ways that the existing laws can be strictly implemented.

The former CBN management under Godwin Emefiele seemed to have lacked the political will to streamline ATM operations. However, in a 21st century economy, the present order is desirable.

In an economy where the informal sector contributes hugely to the national GDP, these actions are urgently needed. ATM penetration is very low. Even where some machines are located in the same place, many are not functional, making transactions very cumbersome for customers.

In many cases, the ATMs are concentrated in certain areas that are often underpopulated.

Giving orders might be the easy part.

We believe that the CBN itself has a duty to both the financial institutions and customers. They must ensure that modern ATMs are installed and the ones in existence truly functional. The people must have easy access to their money to facilitate economic activities.

The ideas are commendable but like most policies, strict implementation would be necessary.

The saying that money makes the world go round can only be validated when the system functions as in developed economies. However, in a country with many security and infrastructural challenges like Nigeria, carrying out the orders of the CBN might be admirable but it might also come with a series of challenges.

There have been reports of ATMs being vandalised in certain locations across the country. The security of the ATMs should be guaranteed.

Moreover, ATMs operate with electricity, and with poor supply in many parts of the country, it might be a challenge for the banks to fully comply without a commensurate upgrade in power distribution and transmission.

The inter-dependence of ministries and agencies must be seriously evaluated for a functional system. The policy might be good on paper but if any ministry or agency of government drops the ball, nothing will work. The banks and issuers might be willing to obey the orders but the required logistical support must be functionally present for success to be achieved.

The financial sector of any economy is like the heart, but the heart can only work when all the other organs and parts of the body are fit enough to play their own roles efficiently.

It is important to note that no matter how much the apex bank wants ATM services to spread fast, Nigeria still has a sizeable illiterate population that might still not be able to operate one even if it is put at their doorsteps. There must be serious efforts to upgrade infrastructure and provide education and security for success to be achieved.