The Central Bank of Nigeria (CBN) has announced a major revision to its Automated Teller Machine (ATM) transaction fees, effectively eliminating the three free monthly withdrawals previously granted to customers using other banks’ ATMs.
This directive, outlined in a circular dated February 10, 2025, applies to all banks and financial institutions operating in Nigeria and is set to take effect from March 1, 2025.
It was signed by John S. Onojah, Acting Director of the Financial Policy and Regulation Department, and released on the apex bank’s website on Tuesday.
Revised ATM withdrawal charges
According to the circular, the CBN has reviewed the ATM transaction fees stipulated under Section 10.7 of the CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions (2020). The key changes include:
- On-Us transactions (same bank’s ATM): Customers withdrawing from their own bank’s ATM will continue to enjoy free withdrawals.
- Not-On-Us transactions (other banks’ ATMs):
- On-site ATMs (within bank premises): A fee of N100 per N20,000 withdrawal will apply.
- Off-site ATMs (outside bank premises): A fee of N100 per N20,000 withdrawal, plus an additional surcharge of up to N500, will be charged.
- International withdrawals: The charge will be based on the exact amount imposed by the international acquirer.
The most significant change is the complete removal of the previous policy that allowed bank customers three free monthly withdrawals on ATMs belonging to other banks. This means that every withdrawal on another bank’s ATM will now attract a charge.
The circular noted, “Furthermore, 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.”
CBN’s justification for the review
The CBN cited rising costs and the need to enhance ATM efficiency as the primary reasons for the review. The regulator expects this adjustment to accelerate the deployment of ATMs across Nigeria while ensuring that financial institutions appropriately charge customers for the service.
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 (CBN) 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.”
This decision aligns with the CBN’s broader strategy to promote digital banking and reduce reliance on cash transactions, a move that has been a recurring theme in recent financial sector reforms.
Implications for bank customers
- For bank customers, this development means an increase in withdrawal costs, particularly for those who rely on ATMs outside their banks’ networks.
- The introduction of additional surcharges on off-site ATMs also suggests that customers may opt to use their own bank’s ATMs more frequently or explore alternative digital banking options such as mobile and internet banking.
- With the March 1, 2025 implementation date approaching, financial institutions are expected to update their systems and notify customers about the new charges.
