CBN, Withdraw New ATM Charges

Nigerians are once again being subjected to another round of difficulty in accessing services being provided by government and private institutions. Just weeks after the coming into effect of a hike in phone services, they are also faced with another in accessing their hard-earned money.

The Central Bank of Nigeria (CBN) in a circular announced that it is increasing the charges for cash withdrawals from banks’ Automatic Teller Machines (ATM) which will take effect from March 1, 2025.

According to the apex bank, customers will continue to withdraw free of charge when using ATMs operated by their banks. However, withdrawals from other bank ATMs will attract a charge of N100 for a withdrawal of up to N20,000 from an onsite ATM, while an off-site ATM withdrawal for those located outside the bank’s premises, such as malls and airports, will attract a base charge of N100 per N20,000, plus an additional surcharge of up to N500 per transaction. This means withdrawing N20,000 from an off-site ATM of another bank could cost up to N600 per transaction.

Charges on international withdrawals will vary based on the rates set by international transaction processors.

CBN Governor, Olayemi Cardoso, while addressing journalists, explained that the policy aims to encourage banks to improve cash availability at ATMs and expand their ATM network.

“The banks need to be incentivised to ensure regular access to cash at their ATMs, so that people can withdraw money without issues. While the situation has improved, it still needs to work perfectly and seamlessly,” he said.

Cardoso dismissed concerns that the new fee would deter customers from accessing cash, instead arguing that it would enhance financial efficiency and shut down exploitative cash withdrawal services.

“If you withdraw from your own bank’s ATM, there is no charge. If you frequently use another bank’s ATM, you can apply for a card from that bank to avoid charges. This policy will encourage a greater proliferation of ATMs and make access to money more seamless,” he added.

He said the CBN expected that the measure would discourage informal cash handlers from overcharging people for cash withdrawals, ultimately improving the efficiency of Nigeria’s banking system.

While the CBN is coming up with these explanations on this decision, it is doubtful if majority of Nigerians will accept them. This is informed by their experiences of similar reasons when similar hikes in services were introduced.  The increase in electricity tariff has not come with any marked improvement in power supply while many Nigerians are still struggling with the problem of data connection and dropped calls in spite of the 50 per cent increase in phone tariff.

Bank customers also struggle with so many charges that make operating an account a costly venture.

This decision will also have an adverse effect on the operations of POS which have taken over almost all banking services in both rural and urban centres. The likelihood of high charges by POS operators will also see a rise in the cost of commodities and other services as traders try to recoup their capital and make profit.

The scenario is that banking halls may see a resurge of more customers trying to avoid these excessive charges. Again, this will also affect the much-touted cashless policy, which the apex bank has been struggling to see Nigerians buy into. Many people, especially those in rural areas, will be forced to resort to cash transactions to avoid paying these unnecessary charges.

Again, we are doubtful if this measure will see a rise in the number of ATM points or more importantly, the problems of the absence of cash, connectivity problems, and glitches from such machines.

We at the Daily Trust are worried that our policymakers and public officers only think of supporting the inefficiency of our various service providers. Instead of blaming the operators, they will rather punish hapless Nigerians through increases in charges. We believe this increase will not see an end to the problems associated with the operations of ATM machines across the country.

The policy will rather further make Nigerians seek other ways of transacting businesses to avoid being exploited.

We, therefore, call on the CBN to have another look at this policy. We urge for its suspension until the banks improve their operations and provide guarantees for efficient service delivery. In addition, the CBN should come up with terms for the operation of ATMs and the penalties for any violation. A situation where the customer is always at the receiving end of an inefficient service provider must not be allowed to continue.