CBN’s ATM Fee Increase: A Heavy Burden on the Nigerian Public

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By BUKAR Mohammed

The recent circular from the Central Bank of Nigeria (CBN), FPR/DIR/GEN/CIR/001/002, dated February 10, 2025, announcing a review of Automated Teller Machine (ATM) transaction fees, deals another blow to Nigerians already grappling with economic hardship. Effective March 1, 2025, the new policy raises charges on ATM withdrawals, especially when using machines not owned by the customer’s bank. This decision not only appears inconsiderate but also deepens financial exclusion and escalates the cost of banking in Nigeria.

Key Changes and Their Implications

The revised ATM fees include:

• On-Us Transactions (Same Bank ATM Withdrawals): Remain free.
• Not-On-Us Transactions (Other Bank ATMs):
  • On-site ATMs: ₦100 per ₦20,000 withdrawal.
  • Off-site ATMs: ₦100 plus a surcharge of up to ₦500 per ₦20,000 withdrawal.
  • International Withdrawals: Full cost recovery, meaning banks will pass on the exact fee charged by foreign institutions.
  • Remote-On-Us Withdrawals: The three free monthly withdrawals have been abolished.

A Disguised Tax on the Poor

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The CBN defends these changes by citing “rising costs” and the need to encourage broader ATM deployment. However, this rationale is deeply flawed. Nigeria’s banking sector is among the most profitable in Africa, yet instead of reducing costs for consumers, the new policy further enriches banks at the expense of ordinary Nigerians.

Eliminating the three free withdrawals on other banks’ ATMs forces even the most financially vulnerable Nigerians, who may lack access to their bank’s ATM, to pay exorbitant fees simply to access their own money. The introduction of surcharges on off-site ATMs is especially egregious, penalizing those who depend on independent ATM operators, often in rural or underserved regions.

Contradictions and Economic Consequences

This policy comes at a time when:

• Businesses are battling high inflation and currency depreciation.
• Many Nigerians are facing job losses and declining purchasing power.
• The government has already imposed a windfall tax on banks, indicating that they are reaping excessive profits.

Rather than providing relief, the CBN’s new fee structure effectively taxes routine financial transactions, discouraging cash withdrawals and everyday banking activities. This move contradicts efforts toward financial inclusion and risks pushing more Nigerians into informal, cash-based economies.

The Need for a More Considerate Approach

The CBN’s trial-and-error approach to policy-making calls for a more thoughtful and balanced strategy. This decision, like several before it, appears disconnected from the economic realities facing many Nigerians. The central bank should prioritize protecting consumers and ensuring that the banking system serves the wider population. Constructive dialogue among stakeholders is essential to create a fairer banking environment that emphasizes financial inclusion and accessibility. By addressing these concerns, the CBN could help restore trust and stability in the nation’s financial system for all Nigerians.

BUKAR writes from Kano