The Central Bank of Nigeria (CBN) recently announced plans to conduct spot checks on Automated Teller Machines (ATMs) and teller points in some branches of Deposit Money Banks (DMBs) in the country. The action is to enable the regulator tackle rising cases of counterfeit notes. In a statement, the apex bank decried the rising incidences of counterfeit notes paid through some commercial banks ATMs and Teller points. Regrettably, the situation has continued unabated despite moral suasion to the affected banks. To check the menace, the CBN will henceforth impose a sanction of N1 million on any branch of bank found with counterfeit notes in ATMs/Teller points. However, the enforcement of the fine will commence after the launch of the policy document.
We commend the move by the CBN to rid the system of counterfeit notes, even though the fine is like a slap on the wrist that may not serve as deterrent to erring banks. While collaboration with key currency management stakeholders is a step in the right direction, more drastic measures are necessary to ensure that banks do not dispense counterfeits notes in their ATMs and Teller points. Beyond conducting the spot checks on ATMs and Teller points, we urge the apex regulator and the management of the banks to investigate insider abuse. There should be no hiding place for any bank staff who engages in such dubious act. It also shows weak governance and ethical standards in our financial services sector. Only a tough stance will serve as appropriate measure to stop the trend because insider abuse is a threat to the banking industry.
The CBN must provide clean banknotes to the banks to stem the dispensing of counterfeit notes. In fact, the growth in economic activities and the upsurge in population have necessitated the rise in the volume of banknotes in circulation. Equally true is the fact that fraud is increasing in the banking sector and must be checked to safeguard customers’ accounts. A security assessment report by the CBN revealed that ATMs/Teller points have become platforms where most fraudulent electronic transactions take place. This ugly development poses threat to the stability of the sector.
The CBN should quicken the spot checks on counterfeit notes. It should also address the issue of excessive bank charges. Some customers often complain about multiple charges and unauthorised deductions and the non-adherence to guidelines by some banks. The Consumer Protection Department of the apex bank should do more to protect the customers. There is need to adopt effective mechanisms to address customers’ grievances and enhance public confidence in the banks.
Also, the banks should tighten their internal control systems as part of a multifaceted approach to check insider abuse. We hope the apex regulator will come up with a stricter sanction as the N1m fine may be grossly inadequate to check the counterfeit notes in the ATMs/Teller points. Strengthening the governance code will likely bring about more trust which will ensure that the banks render effective and efficient services. In addition, we advise the CBN to ensure strict compliance of its 2015 Circular that directed DMBs to implement a marker/checker control structure for all payment platforms, including ATMs.
Every economy is as strong as the transparency of services offered by its banking sector. Banks must encourage customers to make use of ATMs/Teller points by making sure that the money they get through these platforms are genuine and clean notes and they are not charged excessively. In this era of globalisation, one of the ways to satisfy customers and encourage economic efficiency is to create no room for unethical practices in the sector. That is why the CBN and the banks should regularly conduct “autopsy” on ATMs, Teller points and other payment platforms. We believe that this will enhance the effectiveness of e-payment transactions.