Thursday, March 25, 2010

Automatic Teller Machines: A Revolution and its Pains

On March 15, 2010, Consumer Protection Council (CPC) held a Consumer Interactive Forum in Abuja. At the forum, Mr. Chris Chukwu, the Deputy Director, Financial Policy and Regulation Department of the Central Bank of Nigeria who stood in for the CBN Governor said Automatic Teller Machine fraud is among the leading complaints coming to the apex bank. The Director-General, CPC, Mrs. Ify Umenyi also observed that complaints received in CPC on financial services for 2008 and 2009 put ATM complaints second behind non-issuance of share certificate. Really, the soaring incidences of ATM fraud should worry any bank customer. This piece looks at the pros and cons of the ATM revolution in Nigeria.
According to an internet source, “the very first ATM in Nigeria was installed by National Cash Registers (NCR) for the defunct Societe Generale Bank Nigeria (SGBN) in 1989”. ATMs are operated via debit and credit cards. There are three variants of these in Nigeria. They are the Standard Card, Verve Card and Master Card. Though ATM might have been introduced more than 2 decades ago in Nigeria, it was not until the post-consolidation era in 2005 that the machines became popular. The innovation was first piloted in Lagos before being deployed nationwide. Advantages of ATM are legion. It saves time and helps to decongest banking halls as more people prefer to use their Debit Cards to make withdrawals. It makes withdrawal possible beyond traditional banking hours. Most banks in Nigeria operate between 8am – 4pm. However, ATM is available every hour of the day including weekends and national holidays which are off-days for banks. ATMs are also available beyond bank premises. They are deployed to Hotels, Restaurants, Hospitals, Shopping Malls, Schools and just about anywhere there might be need for it. ATM fosters banks cooperation and unity as it is possible to use a bank’s Debit Card on another bank’s ATM. It indirectly encourages savings as many people now keep their money in banks rather than under pillow and mattress knowing full well that they can withdraw it any time of the day. With ATM, it is possible to know one’s account balance as more often than not, a text message is sent to the account owner when any withdrawal is made. This SMS contains how much is withdrawn and how much balance is left. This notification is helpful to prevent and trace fraudulent withdrawals as the location of the ATM is stated in the text message. In the event of loss of debit card, it is possible to block it and as such render it useless to any unwarranted user. ATM does not need signature hence; the issue of irregular signature does not arise. The machine helps to reduce needless spending and loss of money to armed robbers and fire.
On the flip side however, Automatic Teller Machine brought with it severe pains, tears and sorrow. The greatest threat to ATM is the emergence of syndicates who specialise in cloning unwary bank customers debit card. The customers debit card details are cloned in such a way as to enable the scammers make successful withdrawals from the customer’s account. The method in use varies. Some of the syndicates send scam electronic mails to thousands of people purportedly from Interswitch (debit card manufacturer) or the bank itself asking customers to update their records which are inclusive of their account numbers and debit card details. Once the customer supplies these details, they use it to clone cards and make withdrawal. Others go to crowded ATM pretending to want to withdraw and using the opportunity to steal peoples debit cards or memorise the details and later go back to clone the cards. Many have been arrested by the police and officials of the Economic and Financial Crimes Commission (EFCC) for this sharp-practise. It is common to hear of ATMs debiting customers for undispensed cash. There are also incidences of ATM machines swallowing bank customer’s debit cards during transaction.
It is becoming increasingly difficult to get new debit cards once it expired or got stolen. Negatively impacting on ATMs is the epileptic power supply. The machines are powered by electricity either publicly supplied by Power Holding Company of Nigeria (PHCN), Generators or Inverters. None of these three is totally reliable. The other shortcoming is constant breakdown of the internet backbone that networks one bank to the other or one bank’s branch to the other. When these happen, customers are frustrated as they find it difficult to make withdrawal. There have also been instances where bank staffs in charge of ATMs also engage in fraudulent activities, helping themselves with some of the monies meant for the machines. The introduction of ATM and computerisation of bank services have also led to job loss as banks now need fewer staffs for their operations.
ATM is desirable and has helped to revolutionise the banking industry. However, banks need to unite in finding lasting solutions to the aforementioned challenges faced by their teeming customers. As affirmed by the Consumer Protection Council Director General, if banks could not tie loose ends that encourage card frauds, then they should be more responsive in accepting liabilities as it is done elsewhere in the world. Bank customers also anxiously await the promised CBN’s definitive directive to guide financial institutions that provide ATM services to consumers.

Sunday, March 21, 2010

The Plateau Conundrum

Nigeria is in its 50th year of independence, unfortunately, the country is yet to achieve national integration. Governance is still largely based on primordial sentiments. Ethnicity, tribalism, nepotism, godfatherism, religious inclination and cronyism still play significant roles in who gets what, when and how in Nigeria. These considerations have become a cankerworm that has eaten deep into our national life so much so that even in federal universities, Vice Chancellors are now appointed from the geo-political zones where the institution is located. Thus, there is presently no Yoruba Vice Chancellor in any South East or South-South zones, likewise, no Igbo Vice Chancellor in any of the 19 Northern states. It does not stop there, more than 30 years after the creation of Federal Capital Territory; no Southerner has ever been a substantive Minister of FCT. There are other ministries like Agriculture and Water Resources which are also exclusive preserve of the Northerners. The adopted principles of federal character and quota systems are lopsidedly applied. All these are antithetical to national integration.
It is primordial sentiments that are the root causes of the Plateau crises, the latest of which took place on March 7 and 17, 2010. By the time the dust settled, over 500 women, children, elderly and infirm had been sent to early grave. The Plateau State conflict is a potpourri of ethno-religious and politico-economic conflict. The two main actors in the crisis have been the Berom, Anagutas, Afizeres, Tarok and some other tribes who lay claim to be indigenes of Plateau State and the Hausa-Fulani ethnic group who are regarded as the settlers. Thus the crisis is about citizenship identities. News report has it that the Plateau crisis has been a recurring decimal since Tuesday, April 12, 1994 when the natives resisted the appointment of Alhaji Aminu Mato as the chairman of the Caretaker Management Committee of Jos North Local Government Area.
In the past 16 years the upheavals have manifested in Jos, Wase, Yelwa, Shendam, Qua Pan and Langtang. In fact, over the crisis, former Governor Joshua Dariye was temporarily removed from office for 6 months when on Tuesday, May 18, 2004 Ex-President Olusegun Obasanjo declared state of emergency in Plateau State and appointed Major General Chris Alli (Rtd.) as the Sole Administrator. By 2008, precisely on November 28, disagreement over the local government election into Jos North led to the destruction of lives and property which official figure put at over 300. The deep rooted nature of the Plateau crises came to fore aftermath of the November 2008 massacre when two different panels of enquiries were set up to look at ‘the immediate and remote causes of the crisis’. While the Plateau State set up Prince Bola Ajibola Commission of Enquiry, the Federal Government inaugurated General Emmanuel Abisoye (Rtd.) Commission of Enquiry. Though the Ajibola panel has submitted its report, the Abisoye panel was still sitting when on Sunday, January 17, 2010 the bubble burst again in a 4 day war of attrition leading to 326 deaths and over 40,000 internally displaced refugees.
There is no doubt that the Sunday, March 7 attacks on Dogon- Nahawa, Zot and Rassat communities in Jos South as well as the March 17 siege on Byei and Baten communities are premeditated reprisal from the January attack on some communities in the Local Government such as Kurujenta and TimTim. It would be recalled that in January, some 150 bodies were recovered from a well and sewage pits from Kuru Karama, according to news-report. Some of the Fulanis arrested over the latest crisis have confirmed that they participated in the attack on Dogon-Nahawa because their people and cows were killed in January. The Federal Government had set up Chief Solomon Lar committee after the January attack; however, the reprisal is obviously a vote of no confidence in the new committee. By far the most worrisome development in the January and March attack is the allegation of bias against the military high command in the State and the Federal level. Christian Association of Nigeria had accused the military of bias and genocide. Political and military juggernauts like the Governor of Plateau State, Da Jonah Jang and General Domkat Bali (Rtd.) have openly accused the military of prejudice and failure to act on intelligence report provided. Expectedly, the military has debunked these allegations.
I am of the opinion that something is fishy in the way security agents and the Plateau State Government have handled the Jos crises. They have chosen to adopt fire-brigade approach rather than a pre-emptive strategy. Why has it been difficult to forestall the violence? Why have there been no successful prosecutions of those arrested since the crisis broke out in 1994? Who are the arrowheads and masterminds of the Plateau crises? Is there any justification to continue to give security vote to Governors who in truth do not have the authority to issue command to the security agencies in their state when there is security breach?
As things stand now, the local economy of Jos and indeed the entire Plateau State has been rendered prostrate by the perennial conflict. Many of those whom were bussed out of Jos by their respective State governments in January have vowed never to return to the once revered “Home of Peace and Tourism”. These include students, traders, Youth Corps members and thousands of those who were contributing to the economy and development of Plateau State. Even the tourism sector of the State has now been destroyed as many local and foreign tourists who go to Jos to enjoy its temperate climate and beautiful scenery have since sought fun in other tourist centres of the country. It will also be foolhardy to expect any investor – local or foreign - to come and do business in a politically volatile environment like Plateau State. What this means is that the high incidence of unemployment and poverty in the State will worsen.
I am in support of the call for Truth and Reconciliation Commission being set up to bring about lasting solution to the Plateau palaver. However, for any peace effort to succeed there must be the political will and sincerity of purpose on the part of the political elite both at the State and national level to see that wilful and malicious destruction of lives and properties is halted in Plateau State and in Nigeria at large. Efforts must be made by the security agencies to mop up the small arms that have been smuggled into Plateau State by the different factions to the crisis. This is very important if the weapons will not come handy during the next general elections which is months away. In the short term, the internally displaced people must be properly resettled and those who suffered financial and material loss must be adequately compensated.