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Legal fireworks over offsite ATMs begin tomorrow

By Babajide Komolafe
The Federal High Court in Benin will tomorrow begin hearing in a suit by a bank customer challenging the Central Bank of Nigeria (CBN)’s directive on offsite ATMs.

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Last year,  the CBN barred banks from deploying ATMs outside their branches, and gave them till March 31st to redeploy such  ATMs (offsite ) to their branches.

But a customer of UBA, Intercontinental Bank and Oceanic Bank, Barrister Dele Igbinedion, in a suit  “Barrister Dele Igbinedion  (plantiff) Vs Central Bank of Nigeria and Governor, Central Bank of Nigeria (defendants) challenged  the power of the CBN to give such directive to the banks, arguing that the directive is contrary to the provisions of the CBN Act No 24 of 1991 and Banks and Other Financial Institutions Act 25 of 1991.

According to the originating summons, Igbinedion wants the court to determine: “Whether the 1st  and  2nd Defendant’s Order conveyed by a circular issued sometime in April 2009  barring all Banks in Nigeria  from deploying or operating Automated Teller Machine outside their branches (offsite ATMs), by  31st  March 2010 (or further date ) is not contrary to the provision of the Central Bank  Of Nigerian Act No. 24 of  1991, the Banks  and other Financial Institutions Act No. 25 of 1991 and an abuse of power under the Constitution of the Federal Republic of Nigerian 1999.

“Whether the 1st and 2nd Defendant further Order conveyed by the circular ordering all banks in Nigeria to redeploy all Automated Teller Machines outside their branches (offside ATMs) by 31st March 2010 (or any further date )  is not contrary to the provision of the Central Bank Of Nigerian Act No. 24 of  1991, the Banks  and other Financial Institutions Act No. 25 of 1991 and an abuse of power under the Constitution of the Federal Republic of Nigerian 1999.”

Consequently, Igbinedion seeks:  A Declaration  that 1st  and 2nd Defendants’ Order conveyed by circular dated sometime in April 2009 barring all Banks in Nigeria from deploying or operating Automated Teller Machines (ATMs) outside their branches and redeploy all such ATMs  by 31st  March 2010 (or any further date ) is contrary  to the provision of the Central Bank of Nigeria  Act No. 24 of  1991, the Banks  and other Financial Institutions Act No. 25 of 1991 and an abuse of power under the Constitution of the Federal Republic of Nigerian 1999.
An Order of Court nullifying and or setting aside the above mentioned Order/Circular.

An Order of perpetual injunction restraining the 1st and 2nd Defendants  by themselves, their agents, servant,  private or howsoever called from enforcing or further enforcing the aforesaid Order/Circular.

And any such further orders as this honorable court may deem fit to make in the circumstances of this case.
In a telephone conversation with Financial Vanguard, Igbinedion averred that the CBN Act and BOFIA do not empower the CBN to give directives to the banks. The apex bank he said, can only make rules and regulations which must be gazetted before it is executed.

He said the CBN can only give administrative directive which is to staff and not to banks. The banks he said are not parastatals under the apex bank but businesses hence could not have been subject to directives of the CBN.

He said also that banks have a banking license which stipulates what they can do and not do, and for the CBN to change that, it would have to make amendment to the license and not by issuing a directive. He noted that the CBN apart from stopping them from a business they are licensed to do, also gave their business to pre selected companies, adding that this is wrong.

But a top official of the CBN who spoke to Vanguard on condition of anonymity said that the customer has expressed his own opinion and only the court has the final say. He said the decision of the apex bank barring banks from offsite ATM was conveyed to them through a circular and not a directive as being claimed by Igbinedion.


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