On February 10, 2025, the Central Bank of Nigeria announced a significant revision to Automated Teller Machine withdrawal charges, set to take effect from 1 March 2025.
In a circular reflecting the same date, the apex bank directed all banks and financial institutions to implement new ATM withdrawal charges from 1 March 2025.
This means customers will now pay for every withdrawal made from another bank’s ATM.
The review affects the charges prescribed in Section 10.7 of the CBN Guide to Charges by Banks, Other Financial, and Non-Bank Financial Institutions (2020).
The circular, signed by John Onojah, Acting Director of the Financial Policy and Regulation Department at the CBN, is expected to accelerate the deployment of ATMs across the country while ensuring that financial institutions apply appropriate charges for the service.
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 made from a customer’s bank ATM will remain free.
However, customers using another bank’s ATM will now be charged N100 per N20,000 withdrawal when using ATMs located within bank premises.
For withdrawals made at off-site ATMs, a charge of N100 per N20,000 withdrawal will apply, along with a surcharge of up to N500.
The surcharge, which will be an income of the ATM deployer or acquirer, must be disclosed at the point of withdrawal.
The CBN also stated that international ATM withdrawals would be charged at the exact rate set by the international acquirer.
The apex bank attributed the review to rising costs and the need to enhance efficiency in ATM operations.
The circular read, “In response to rising costs and the need to improve the efficiency of Automated Teller Machine 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 1 March 2025.”
The new charges mean that bank customers who frequently use ATMs belonging to other banks will now incur higher costs.
The introduction of additional surcharges on off-site ATMs could also lead to increased reliance on digital banking channels such as mobile apps and online transfers.
With banks expected to implement the new structure from 1 March, customers may need to adjust their banking habits to avoid additional fees.
The CBN’s directive aligns with ongoing efforts to promote cashless transactions, a policy that has seen increased regulatory attention in recent years.
This review of ATM charges follows a recent warning from the CBN that any bank found not dispensing cash via ATMs would be sanctioned.
The CBN recently sanctioned nine Deposit Money Banks with fines totalling N1.35bn for failing to ensure cash availability via ATMs during the festive season.
Each of the banks was fined N150m following spot checks that revealed non-compliance with the apex bank’s cash distribution guidelines.
The affected banks included Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc.
The fines, our correspondent confirmed, would be directly debited from the banks’ accounts with the CBN.
This policy change has sparked widespread discussion due to its potential impact on consumers and the broader Nigerian economy.
N100 charge for withdrawals below N20,000
The apex bank announced during the week that Nigerians withdrawing less than N20,000 from another bank’s ATM will still be charged a fee of N100 per transaction.
This was disclosed in an FAQ document published by the Central Bank of Nigeria on its website on Thursday, providing further details on the new directive.
Off-site ATMs, which are located outside bank premises, such as in shopping malls, fuel stations, and other public spaces, will attract an additional surcharge of up to N500 per transaction.
For international ATM withdrawals, charges will be based on cost recovery, meaning customers will bear the exact fee applied by the international acquirer.
The CBN stated that the charge on withdrawals below N20,000 is intended to prevent customers from splitting withdrawals into smaller amounts to avoid fees.
The FAQ document read, “Yes, the fee of N100 will apply if you withdraw less than N20,000 from another bank (a bank other than the one that issued your payment card).
“The reason for applying the fee for every N20,000 withdrawal is to prevent customers from being compelled to break their withdrawals into smaller amounts to avoid charges.
“In other words, ATM transactions will incur a base fee of N100 per transaction. It is also important to note that a tiered fee structure will apply for transactions exceeding N20,000, with an additional N100 charged for each subsequent withdrawal of N20,000 or a portion thereof.”
Customers withdrawing more than N20,000 from another bank’s ATM will be charged an additional N100 for every subsequent N20,000 or portion thereof, the document stated.
Another significant change in the revised structure is the removal of the three free monthly withdrawals previously allowed for customers using other banks’ ATMs.
From 1 March 2025, all withdrawals at another bank’s ATM will attract charges, potentially increasing costs for customers who frequently use ATMs outside their primary bank.
The apex bank clarified that financial institutions are not permitted to charge more than the prescribed fees, although banks may reduce charges depending on their business strategy.
Any bank found violating the directive, including compelling customers to withdraw less than N20,000 per transaction despite sufficient funds in their account, will be sanctioned accordingly.
Customers who experience such restrictions are encouraged to report complaints to the CBN Consumer Protection Department via [email protected].
To minimise transaction fees, the CBN has advised customers to prioritise withdrawals from their bank’s own ATMs.
It also encouraged Nigerians to explore alternative payment methods such as mobile banking applications, POS transactions, and electronic transfers to reduce reliance on cash withdrawals.
No cash
Our correspondent, who monitored ATMs from the Ikoyi end of Lagos down to Gbagada, Ojota, Ketu, CMD Road, and further to Ogba and Ojodu-Berger, observed that most ATM centres were not dispensing cash.
For instance, on Friday afternoon, three tier-one banks along CMD Road were not dispensing cash at all.
At the entrance of one of the banks, a security personnel informed our correspondent, “No cash.”
At the next bank, just a few minutes away, only one ATM was dispensing, and withdrawals were limited to N10,000 per transaction.
At the next bank, there was no cash, and the same was true for the following bank, until the Shangisha Junction end of the road.
Ironically, at most POS stands near the banks, cash was readily available.
Our correspondent met a POS agent, Divine Grace Concept POS, who offered to provide N150,000 in cash for a service charge of N5,000.
“I just want to help you. Ask anyone, I am helping you, and that is because you said you would transfer. If you want to use your card, I will not dare collect that kind of money because of the charges,” the agent said.
Unending charges
The new ATM withdrawal charge is just one of many deductions that Nigerians face daily.
Most banks deduct between N50 and N100 monthly for account maintenance. Interbank transfers attract charges ranging from N10 to N50 per transaction. Customers are also charged between N6 and N15 per SMS alert on transactions, while using a bank’s short service code incurs a charge of N6.95.
Additionally, a N50 deduction applies to transfers above N10,000, while ATM card replacements attract fees ranging from N1,000 to N2,000.
Some of these charges also include a 7.5 per cent Value Added Tax, further increasing deductions.
Many Nigerians argue that these charges are excessive, especially given the economic hardship in the country.
Nigerians lament multiple deductions
The recent introduction of additional ATM withdrawal fees by the CBN has sparked widespread frustration, as many are already burdened with multiple banking charges.
For many, these deductions are not just figures on a bank statement but represent a significant strain on their finances.
“I work as a secondary school teacher, and my salary is barely enough to cover my expenses,” said Tunde Olalekan, a resident of Surulere, Lagos.
“Now, I have to think twice before making a withdrawal. The additional N100 charge may not seem like much to some people, but when added to other deductions, it reduces my already small income.”
Similarly, Mercy Okoro, a market trader at Mile 12, lamented how the charges affect small business owners.
“I rely on POS agents because banks are often crowded, and now they are charging more. If I withdraw N10,000 twice a week, that’s N200 gone just on withdrawal fees. It’s unfair. Do they want to kill us?”
Students and young professionals are also feeling the pinch.
A final-year student at the University of Lagos, Samuel Onuoha, described how the fees eat into his limited allowance.
“I don’t have a steady income, so every naira counts. Sometimes, my parents send me N5,000, and after bank deductions and charges, I have less than I need for transport and feeding. It’s frustrating.”
Shehu Sani fumes
Former senator representing Kaduna Central, Shehu Sani, has condemned the scrapping of free ATM withdrawals for customers using other banks’ ATMs.
Reacting in an X post on Thursday, Sani said the hike in ATM charges could push Nigerians back to physically cashing cheques in banks.
He wrote, “If the CBN continues to increase ATM charges, people will return to the era of physically entering the bank to cash their cheques.”
Businesses, workers struggle
Small businesses, which rely heavily on cash transactions, are also struggling to adapt.
“We encourage our customers to pay via transfer, but not everyone is comfortable with that,” said Aisha Bello, a supermarket owner in Abuja.
“Now, with these fees, more customers are withdrawing less cash, which means they hesitate to buy more than they need. It is affecting our daily sales.”
Commercial drivers, who predominantly operate in cash, also feel the weight of these deductions.
Sani Abdul, a tricycle operator in Kano, expressed his frustration to our correspondent on a telephone conversation on Wednesday.
“I withdraw money daily to buy fuel and settle my conductor. If I withdraw N10,000 and am charged N100, that’s money I could have used to buy extra fuel. These charges are killing small workers like us.”
A call for review
Financial analysts and economists have weighed in on the impact of these charges on individuals and the economy.
A development economist and financial expert, Francis Adebayo, criticised the banking system for overburdening Nigerians.
“The CBN needs to review these policies. It is becoming unbearable. The apex bank knows that most of these ATMs do not have cash. They know. One may need to depend on the ATMs of other banks.
“While financial institutions need to generate revenue, excessive deductions discourage financial inclusion. Many Nigerians will opt to keep their money in cash rather than deposit it in banks, which contradicts the goal of a cashless economy.”
Similarly, banking expert Uche Ezeh called for a revision of the charges.
“The increase in transaction costs could push more people towards informal financial services, such as cash savings and non-regulated financial institutions. The government needs to find a balance between encouraging digital banking and ensuring that people are not discouraged from using formal financial services due to high costs.”
With the rising cost of living, many Nigerians hope the government and banking sector will reconsider these charges.
Broader implications
Consumer rights groups have started advocating for a reduction in banking fees, arguing that citizens should not be unfairly burdened in the pursuit of a digital economy.
Until then, many Nigerians will continue to feel the financial strain caused by these deductions, making everyday banking an expensive necessity.
A market leader in Andoni, Rivers State, Mrs Felicia Solomon, noted that the increased charges may discourage individuals, especially those in rural areas, from using formal banking services, thereby hindering financial inclusion efforts.
She also noted that, to avoid these fees, some individuals might opt to carry more cash, which poses security risks and undermines the CBN’s cashless policy initiatives.
“Persistent and multiple charges can erode trust in the banking system, leading customers to seek alternative financial solutions, some of which may be unregulated,” the market leader said.
While the CBN’s policies aim to regulate and standardise banking operations, it’s crucial to consider the human impact of these decisions.
For many Nigerians, the accumulation of various bank charges represents a significant financial burden, affecting their daily lives and financial well-being.
As the banking landscape evolves, there is a pressing need for policies that balance regulatory objectives with the economic realities of the populace, ensuring that the financial system remains both efficient and inclusive.
