Source allAfrica: Comfort Ekeleme, 31 March 2010

Lagos — With less than 10 percent of the Nigerian banks complying with the March 31, 2010 deadline given to them by the Central Bank of Nigeria (CBN) to move their Automated Teller Machines (ATMs) to their premises, indications may have emerged that CBN may be no going back on such directive.

Instead, the the apex bank is said to have resolved to raise the sledge hammer on defaulting banks. Daily Champion gathered that only three banks have made appreciable efforts to comply, while a good number of banks are making frantic efforts to avoid the sanctions of the apex bank by beating the deadline.

The spokesman of CBN, Mohammed Abdullahi told Daily Champion that the apex bank had given the Nigerian banks up till March 31 to comply with the directive, adding that the general public should wait until March 31, adding that anything can happen before that time, even as he affirmed that some banks have complied with the apex bank directive.

The CBN had, in a circular to all Deposit Money Banks issued on April 8, 2009, set the deadline for June 30, 2009 for banks to hands-off control of the off-site ATMs and invited bids from interested firms to take over control of these machines.

However, it became apparent to the apex bank that this date was not feasible making it to subsequently move the deadline to March 31, 2010.

In another circular issued on August 27, 2009, CBN stated that the extension of the deadline became necessary”in order to ensure a success of the exercise and proper commencement of operations of the emerging appointed consortia.

“The Central Bank of Nigeria is taking appropriate steps to facilitate the appointment of a number of ATM consortia to effect the current policy of redeploying offsite ATMs and has received applications from some registered financial companies in this regard.”

Investigations revealed that First Bank of Nigeria Plc, United Bank for Africa Plc, Diamond Bank Plc, Wema Bank Plc and Ecobank Plc had within the last two weeks handed over their offsite ATMs to the consortium appointed by the apex bank to operate offsite ATMs.

Currently, a total of 1,446 ATMs have been handed over by these banks to ATM Consortium.

A breakdown of the figure indicated that while UBA had handed over 700, making it the bank with the highest number of offsite ATMs, FBN, Ecobank and Wema bank followed, handing over 410, 19 and 10 ATMs respectively.

Also, Managing Director and Chief Executive Officer of ATMC, Mr. Olumide Bajomo, said the five banks have all blazed the trail in demonstrating compliance with the apex bank’s decision.

He expressed delight at the handover by the banks who happen to be ATMC’s major shareholders and views the gesture as a demonstration of their commitment and endorsement of ATMC’s repositioning plan.

Deji Oguntonade, an electronic banking consultant and a top official at Sugar Ant Technologies Ltd, said the March 31st deadline is not a feasible one. “It is not realistic. Out of 23 or 24 banks, only three have handed over about 1500 ATMs based on the Central Bank’s regulation. So another month would not have any impact because the total ATM outside banks is about 10,000; the logistics of handing them over, I don’t think can be achieved in less than a month. Because the directive is only a year old and nothing much has happened since then. They would have to extend the deadline or just be silent about it,” he said.

Mr. Oguntonoade said that though banks are co-owners of the existing consortium, they have not invested much in it. “I think it’s a lazy way to achieve something. They want to achieve the operations of ATMs beyond the banking premises. Now, a company called ATMC was established about six years ago to penetrate into areas where bank branches do not exist like shopping malls, airports, petrol stations and all that.

“It should be noted that banks are also part owners of these ATMC, but they did not invest enough or focus on this ATMC to capitalize it enough to acquire the ATMs, so of course the company was almost dead with about 300 ATMs or so. And then we had banks that came up and started investing in their own ATM establishment outside the banking premises and competing with ATMC, so banks have thousands of ATMs outside their branches,” he explained.

Survival games

Mr. Oguntonoade further noted that in a bid to survive, the ATMC consortium decided there had to be some kind of regulation or directive that says that no bank should have ATMs outside their premises so they are more or less ordered to hand over the ATMs to ATMC. “But my fear is that ATMC is now taking over all the ATMs owned by banks. Maybe the ATMs would be converted to capital, like an investment by the banks, but what happens after that? Is the ATMC now ready to live up to the challenge?”

He argued that if the plan worked, there could be one or two more such consortium waiting for approval.

In April 2009, the Central Bank issued a statement to all banks to redeploy all existing ATMs in public places to their premises on or before June 30, 2009.

According to the central bank, this became necessary because of the rising number of ATMs in public places, such as airports and hotel lobbies, (a trend which was fallout of the unhealthy competition among the banks).

“The CBN has observed with concern that the banks are competing with the ATMC in the deployment of ATMs in public places. A worrisome trend is the number of ATMs at the airports and hotel lobbies, which if unchecked would soon, congest these public places” the circular stated.

In June, the regulatory body however, observed that there was too little effort made by the banks to meet the deadline. It said that adverts would be placed for an additional consortium as it again shifted the deadline to August 31, 2009.

In August, the central bank issued another circular again, extending the deadline to March 31, 2010 with the argument that it wanted to ensure the success of the exercise.

Over 20 banks are yet to comply with the Central Bank’s directive, with some of them saying they are still making plans to comply with the directive.

With this development, QuickCash ATM network installed capacity has increased from 350 ATMs to 1,466. Specifically, UBA Group handed over 700 ATMs, First Bank relinquished 410 with the balance contributed by Diamond Bank.

Over the next few weeks, officials of the ATMC said they expect other banks namely Zenith Bank, Fidelity Bank, Afribank, Union Bank and Wema Bank to follow suit, adding that ATM-C would soon commence the process of rebranding and deploying the QuickCash brand across the entire bank branded cash machines and ATMs that were handed over to them.

ATM-C is owned by eight of the leading Nigerian banks, namely Afribank, Diamond Bank, Fidelity Bank, First Bank, UBA, Union Bank, Wema Bank and Zenith Bank as well as Accenture. The company was set up in 2004, with the sole mandate to deploy a network of 2000+ shared ATMs in non-bank locations across the country.

ATM Consortium (ATM-C), Nigeria’s premier Independent ATM Deployer (IAD) and operator of the QuickCash ATM network has announced that three banks have handed over 1,000 ATMs to its network. The cash machines belong to UBA Group, First Bank and Diamond Bank.

The banks’ decision to handover the ATMs to ATM-C complies with the Central Bank of Nigeria (CBN)’s directives on deployment of off-banking site ATMs, which requires that all banks should either handover their cash machines, deployed outside the bank locations, to consortia or relocate them to their premises on or before March 31, 2001.

With this development, QuickCash ATM network installed capacity has increased from 350 ATMs to 1,466. Specifically, UBA Group handed over 700 ATMs, First Bank relinquished 410 with the balance contributed by Diamond Bank.

Nigerian Bank Nigeria Central Bank Of Nigeria, Diamond Bank Plc, Ecobank, First Bank of Nigeria Plc, United Bank For Africa Plc, Wema Bank Plc