The Central Bank of Nigeria’s decision to scrap the three free withdrawals previously allowed on other banks’ ATMs, has sparked criticism from bank customers, who argue that it will increase their banking costs, especially for those who rely on other banks’ ATMs for convenience.
Customers voiced their concerns on Tuesday after the CBN released a circular signed by the Acting Director of the Financial Policy and Regulation Department, John Onojah.
According to the circular titled ‘Review of Automated Teller Machine Transaction Fees,’ the CBN has eliminated the three free monthly withdrawals previously allowed for customers using other banks’ ATMs.
It read, “The three free monthly withdrawals allowed for Remote-On-Us (other bank’s customers/Not-On-Us consumers) in Nigeria under Section 10.6.2 of the Guide shall no longer apply.”
Under the new directive, withdrawals from a customer’s own bank’s ATM will remain free. However, using another bank’s ATM within bank premises will attract a N100 fee per N20,000 withdrawal. For off-site ATMs, the same N100 fee applies, plus a surcharge of up to N500, which will go to the ATM operator and must be disclosed at the time of withdrawal.
The CBN stated that international ATM withdrawals will be charged at the rate set by the international acquirer. It attributed the policy review to rising costs and the need to improve ATM service efficiency.
The circular read, “In response to rising costs and the need to improve the efficiency of Automated Teller Machine (ATM) services in the banking industry, the Central Bank of Nigeria has reviewed the ATM transaction fees prescribed in Section 10.7 of the extant CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions, 2020 (the Guide).
“This review is expected to accelerate the deployment of ATMs and ensure that appropriate charges are applied by financial institutions to consumers of the service. Accordingly, banks and other financial institutions are advised to apply the following fees with effect from March 1, 2025.”
After the circular’s release, the Chairman of the Bank Customers Association of Nigeria, Dr. Uju Ogubunka, told The PUNCH that while the increase was reasonable given the economic situation, he was concerned about the rate of the hike.
He said, “It should have been expected. Other places have increased their fees. The only thing one can talk about is the extent of the increase. Electricity, telephones, and even the open market have recorded increases in prices. The issue should not be the increase but the extent of it. Is it reasonable? Is it affordable at this point in time?
“It is not only banking services that are increasing fees. If you ask me, I will say let’s move on. Someday, these things will adjust themselves.”
Meanwhile, financial analyst, Segun Aremu warned that the policy could negatively affect the CBN’s financial inclusion efforts.
He said, “In Nigeria, there are still a lot of people unbanked; this is more like a discouragement. We are looking at the masses, who have N10,000 and N20,000, who are going to be mostly affected. If you are in an area where there’s only one bank, you have to bear that extra cost. What we should be getting now is cheaper costs, not expensive costs of transaction.
“This will bring more to banks, and more people will be forced to use electronic banking. I think they want to reduce dependency on cash as well, but at this point in the economy, people still need cash. We have not transitioned to mobile banking and such. We are getting there, but I feel like this is coming too early. The intentions may be good, but before March 1, when they will implement it, I hope we will see an improvement. Anyway, Nigerians are very adaptable.”
A social media user on X, Oladele Olowookere, commented, “With the new ATM withdrawal charges aiming to take place on 1st March 2025, it is obvious FGN and CBN want to cripple every middle-level or low-level income earner to paupers. These charges will cripple people’s account balances like crazy. #20,000 na #550 charges.”
Another user, Evuakpo Afoke, criticized the move, saying, “This government is really taking Nigerians for granted. After stamp duty, they are now increasing the charges on ATM withdrawals. So, they benefit when my money is deposited in my account and want more when I withdraw it. All the while, they want cashless transactions.”
