How Nigerian Banks Frustrate Cash Trapped Customers

Customers of Nigerian banks have decried the inability of the lenders to make cash available on the Automated Teller Machines (ATMs) and even online transfers when needed.

This, however, has been attributed to operational problems rather than liquidity issues as some analysts believe that if such persists, the financial inclusion drive of the central bank would be at risk.

At the convenience of her home in Amuwo Odofin, Lagos, a middle-aged woman used the USSD code of her bank to transfer N100,000 to a customer with a UBA account on December 18, 2021 but was not successful.

The response she received after initiating the transaction was, “your account is restricted please dial *737*20*BVN# or visit any GTBank branch to link your BVN to your account.”

The woman who was sure that her account had been linked to her BVN, however, followed the instruction, only to receive another response, which read, “Your account is already linked to your account. Dial *568*0# to confirm your BVN.”

On different occasions at Lagos Island, customers were seen moving from one ATM machine to the other in search of cash but were disappointed.

The response displayed by one of the ATMs of a first-generation bank was, “this transaction cannot be completed” and the second ATM machine said “no service.”

It was either the ATM machines of commercial banks around Marina area of Lagos that could not dispense cash or the cash transactions were delayed due to network issues.

Some banks’ ATM machines visited randomly by BusinessDay during the festive period were the ones owned by First Bank of Nigeria, GTBank, UBA, FCMB, Access Bank, Stanbic IBTC, Polaris Bank, among others.

Responding to the development, Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise (CPPE), said this may slightly be a technology issue, noting, “I believe that it is a question of the banks strengthening their technology capacity to be able to handle some of these transactions.”

He said quite a lot of transactions were taking place online these days, adding that the use of cash was getting lower.

As more transactions migrate online or through electronic channels, he said the capacity of channels needs to be strengthened so that some of the downtime, failure of PoS, failure of ATMs, network collapsing in the banks, and all that would be reduced.

“I think it is a technology issue. So, we have to engage the banks to make sure that they invest a lot more in technology, and we also need to appeal to the government to support the telcos who are providing the backbone for some of these technologies to happen.

“Something like the fibre optic cables and technology. All of these things are very important ICT infrastructure that other sectors of the economy need. But as for cash, I am not sure that there is any bank that is insolvent. I’m not sure there’s any bank that is distressed. So, people are not able to get cash because there is a challenge with technology,” Yusuf told BusinessDay.

Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), said a key focus of the central bank under his leadership had been enabling the build-out of a robust payment system that will provide cheap, efficient, and faster means of conducting payments for most Nigerians.

“With the growing pace of digitisation globally, it is essential that we leverage digital channels in fulfilling this objective,” he said.

Total transaction volumes using digital channels more than doubled between 2018 and 2020, as volumes rose from 1.3 billion to over 3.3 billion financial transactions in 2020. Digital payment channels, he said, also help to support the continued conduct of business activities during the lockdown.

“Our robust payment system has continued to evolve towards meeting the needs of households and businesses in Nigeria. Reflecting the confidence in our payment system, between 2015 and September 2021, about $900 million has been invested in firms run by Nigerian founders,” Emefiele said.