Odinkalu, others sue Nigeria Central Bank for N65 ATM charge

Godwin Emefiele, CBN governor

Three Nigerians have filed a suit against the Central Bank of Nigeria, CBN, for its recent decision to reintroduce charges on cash withdrawals from a different bank’s automated teller machine, ATM, after the third use in a month.

The applicants – Seember Nyager, Chukwuma Chinaka and Chidi Odinkalu of A&E Law Partnership, Abuja, want the court to determine whether the CBN’s directive contained in an August 13 circular for the reintroduction of N65 charge was in the national interest.

The trio, who filed the application Number FHC/ABJ/CS/817/2014 dated November 4 before the Federal High Court, Abuja, also joined the CBN governor, Godwin Emefiele, and Attorney-General of the Federation and Minister of Justice, Mohammed Adoke, as defendants.

In the statement of claim accompanying their application, the applicants said they were seeking a declaration of the court to determine whether the CBN and Mr. Emefiele’s directive of August 13 did not amount to unlawful expropriation of private property without compensation in contravention of Section 44 of the 1999 Constitution.

The applicants also asked the court to determine whether the procedure of issuing the directive by the CBN and Mr. Emefiele was not incompatible with their role as regulators of the financial services and banking system in Nigeria under the provisions of the CBN Act 2007.

They also want the court to determine whether the Central Bank and Mr. Emefiele had the right, power and privilege to issue such a directive.

Based on the answers to the above questions, the three applicants said they were seeking a declaration of the court that such a directive by CBN and Mr. Emefiele without their consent was unconstitutional, null and void, and in violation of Section 44(1) of the 1999 Constitution.

They also asked the court to declare that the directive by the CBN and Mr. Emefiele that ATM cash withdrawals accessed at the cost N65 per withdrawal from the 4th remote-on-us transactions by them and other bank customers in a month was null, void and of no effect.

Consequently, the plaintiffs demanded an order of the court setting aside the directive as well as directing the CBN and Mr. Emefiele to forthwith direct all banks and other institutions to stop collecting the charge immediately.

In the affidavit sworn on behalf of the plaintiffs, Ms. Nyager said she had a savings Account with Guaranty Trust Bank, GTB, and was issued a MasterCard ATM Debit Card. She said she was also aware that Mr. Chinaka has a savings account with Diamond Bank and was issued a VISA ATM Debit Card while Mr. Odinkalu has an account with Standard Chartered Bank and was also issued an ATM Debit Card.

According to Ms. Nyager, as a result of the ATMs of their banks being “very limited and most times out of service for undisclosed reasons,” they often were forced to patronize other banks’ ATMs for cash withdrawals.

She noted that being charged each month for no fault of theirs was unjust, adding that the directive by the Central Bank and Mr. Emefiele to banks to charge them for such service each month amounted to punishing them for the inefficiency and limitation of their banks.

Ms. Nyager also said the CBN directive was “too onerous” for them, as they did not have the economic capacity to bear the cost of their banks’ inefficiency and limitations.

She said the charges amount to the CBN and Mr. Emefiele rewarding the banks for their limitations and inefficiencies to customers’ detriment.

The Central Bank in its circular of August 13 to all banks signed announced the “re-introduction of ‘Remote-on-Us’ ATM cash withdrawal transaction fee. With the announcement, the CBN said the transaction fee for cash withdrawal on remote-on-us would be N65 per transaction to cover the remuneration of switches, ATM monitoring and fit-notes processing by acquiring banks.

It explained that “the new charge shall apply as from the 4th‘Remote-on-Us’ withdrawal (in a month) by a card holder, thereby making the first three ‘Remote-on-Us’ transactions free for the card holder, but to be paid by the issuing bank.”

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