ABUJA—In a bold regulatory move aimed at protecting consumer rights and ensuring fair banking practices, the Central Bank of Nigeria (CBN) has issued a stern warning to all financial institutions: any bank that limits its Automated Teller Machine (ATM) withdrawals to less than N20,000 per transaction will face sanctions. The directive, which forms part of a broader review of ATM transaction fees, comes amid mounting public frustration over rising withdrawal charges and perceived restrictions on cash accessibility.
According to a circular released by the CBN, effective immediately, banks must allow customers to withdraw up to N20,000 per transaction. The circular, which was issued on Tuesday, stipulates that for customers using ATMs of banks other than their own—referred to as Not-On-Us transactions—on-site withdrawals will attract a fee of N100 per N20,000 withdrawn. For off-site ATMs, an additional surcharge of up to N500 per transaction may be applied. Importantly, these surcharges, which constitute the income of the ATM deployer or acquirer, must be clearly disclosed to consumers at the point of withdrawal.
Note that the CBN also instructed that withdrawals previously allowed for Remote-On-Us transactions under Section 10.6.2 of the 2020 CBN Guide to Charges are now abolished. “The fees are based on banks allowing customers to withdraw up to N20,000 per transaction. Any bank that compels a customer with sufficient funds in their account to withdraw less than N20,000 per transaction, against the customer’s desire for a higher sum, would be contravening the spirit of this regulation and will be sanctioned appropriately,” the circular stated.
The move by the CBN is a response to widespread concerns that consumers are being shortchanged by banks that impose arbitrary withdrawal limits, thus forcing customers to make multiple transactions and incur additional fees. This policy shift is intended to ensure that banks do not restrict customers from accessing their money in larger, more convenient sums, which could further burden Nigerians who are already grappling with economic challenges.
Industry analysts have largely welcomed the CBN’s directive, arguing that it is a necessary step to level the playing field for consumers in an increasingly digital economy. “In today’s fast-paced world, access to cash is essential for both personal and business transactions,” said a senior banking expert based in Lagos. “By mandating that banks allow withdrawals of up to N20,000 per transaction, the CBN is ensuring that consumers are not forced to incur unnecessary fees due to restrictive bank policies. This will likely drive banks to enhance their ATM service efficiency and upgrade their infrastructure.”
However, some financial institutions have expressed concerns about the potential impact on their operational costs. A spokesperson from one of the major banks, speaking on condition of anonymity, explained, “While we understand and support the need for consumer-friendly regulations, we also face rising operational expenses—such as increased electricity costs and maintenance for ATM networks. That said, we are committed to complying with the new guidelines and will strive to balance cost recovery with consumer affordability.” The CBN, for its part, clarified that while banks are permitted to charge a lower fee than the N100 per N20,000 if their cost structure allows, they are not allowed to charge any amount exceeding the cap.
To further minimize consumers’ exposure to these fees, the CBN advised customers to withdraw cash from their own bank’s ATMs (On-Us transactions), which will remain free of charge. The regulator also encouraged the public to explore alternative payment channels such as mobile banking, POS devices, and digital wallets that often offer more competitive rates.
Consumer rights advocates have seized upon the CBN’s announcement as a critical victory for the average Nigerian. “This directive is a major win for consumers,” commented a representative of a national consumer advocacy group. “We’ve long been frustrated by the hidden charges and restrictive practices of banks that force us to make multiple transactions to access our funds. The CBN’s policy change will not only improve service delivery but also help reduce the overall cost of living for Nigerians.”
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In addition to ensuring fair access to cash, the new guidelines are expected to accelerate the deployment of ATMs across the country by creating an environment that incentivizes banks to invest in modern, efficient ATM networks. With increased transparency and a more rational fee structure, the overall user experience is anticipated to improve, thus boosting public confidence in Nigeria’s financial sector.
For consumers who believe their rights have been violated, the CBN has provided a channel for complaints. Individuals are encouraged to file their grievances via email at [email protected]. As the new rules take effect, stakeholders across the financial landscape will be closely monitoring the implementation process to ensure that the intended benefits are realized.
In conclusion, the CBN’s decisive action to sanction banks that limit ATM withdrawals below N20,000 per transaction is a landmark policy designed to protect consumers and improve the efficiency of Nigeria’s banking sector.
