Few Weeks After EXCLUSIVE Order On ATM Charges, CBN Sends FRESH Announcement
Nigerians are once again facing significant challenges in accessing essential services provided by both government agencies and private institutions. Just a few weeks after the implementation of higher charges on mobile phone services, they are now confronted with another financial burden— difficulty in accessing their own money.
The Central Bank of Nigeria (CBN) recently issued a circular announcing an increase in charges for cash withdrawals from bank Automated Teller Machines (ATMs). This policy is set to take effect on March 1, 2025. According to the CBN, customers will continue to withdraw cash free of charge when using ATMs operated by their own banks. However, withdrawals from ATMs belonging to other banks will attract a fee of ₦100 per withdrawal of up to ₦20, 000 when using onsite ATMs (located within bank premises). For off- site ATMs, such as those found in shopping malls, airports, or other public locations, the withdrawal charge will consist of a base fee of ₦100 per ₦20, 000, along with an additional surcharge of up to ₦500 per transaction. This means that withdrawing ₦20, 000 from an off- site ATM of a different bank could cost customers as much as ₦600 per transaction.
For international withdrawals, charges will vary depending on the fees imposed by international transaction processors.
Justification by the CBN
CBN Governor Olayemi Cardoso, while addressing journalists, defended the policy as a strategy to incentivize banks to maintain regular cash availability at ATMs and expand their network of cash dispensing machines. According to him, ensuring that ATMs are always stocked with cash is essential for a seamless banking experience. He dismissed concerns that the new fees would discourage customers from accessing their money, arguing instead that the charges would enhance financial efficiency and reduce exploitative cash withdrawal services.
He further explained that bank customers could avoid these charges by using ATMs belonging to their own banks or applying for a card from another bank if they frequently withdraw from its ATMs. Cardoso also claimed that the policy would discourage informal cash handlers from overcharging people for withdrawals and contribute to a more efficient banking system.
Public Skepticism and Concerns
Despite these assurances, many Nigerians remain unconvinced about the necessity and benefits of the policy. Their skepticism is rooted in past experiences with similar increases in service charges, which failed to bring about any tangible improvements in service delivery. For instance, the increase in electricity tariffs has not led to significant improvements in power supply, and the recent hike in phone service charges has not resolved persistent issues such as poor network connectivity and frequent dropped calls.
Additionally, bank customers in Nigeria already contend with multiple charges, making it costly to maintain an account. With the new withdrawal fees, accessing cash will become even more expensive, further complicating financial transactions for ordinary citizens.
One major concern is the potential impact on Point of Sale (POS) operators, who provide essential banking services in both rural and urban areas. POS operators rely on ATMs to withdraw cash for their transactions, and the increased withdrawal charges will likely lead them to raise their service fees. As a result, consumers will bear the brunt of these increased costs, leading to a rise in the prices of goods and services as traders attempt to recover their expenses.
Another possible consequence is the increased congestion in banking halls, as customers attempt to withdraw money directly from tellers to avoid paying excessive ATM fees. This could undermine Nigeria’ s cashless policy, which the CBN has been promoting to encourage digital transactions. Many Nigerians, especially those in rural areas where digital banking infrastructure is still weak, may be forced to return to cash- based transactions to avoid these additional costs.
Doubts Over Improved ATM Services
Although the CBN claims the new charges will lead to better ATM services, many Nigerians are doubtful that this will happen. The country has long struggled with ATM- related issues such as machines running out of cash, poor connectivity, and frequent system failures. Rather than improving service delivery, this new policy might simply place additional financial burdens on customers without addressing the root problems of ATM inefficiency.
The Daily Trust editorial team has expressed concerns that Nigerian policymakers often prioritize supporting inefficient service providers over protecting the interests of the citizens. Instead of holding financial institutions accountable for poor services, they opt to impose higher charges, shifting the burden onto the public. Given past experiences, it is unlikely that this increase in ATM charges will resolve the problems associated with cash withdrawals. Instead, Nigerians may seek alternative ways to conduct transactions in order to avoid being overcharged.
A Call for Policy Review
In light of these concerns, there is growing demand for the CBN to reconsider this policy. Many believe that the decision should be suspended until banks demonstrate clear improvements in their ATM operations. Additionally, the CBN should establish strict operational guidelines and penalties for banks that fail to provide efficient ATM services.
A situation where customers are consistently penalized for the inefficiencies of financial institutions should not be allowed to persist. Instead of increasing charges, the focus should be on improving banking services and ensuring better financial accessibility for all Nigerians.
