- The Central Bank of Nigeria said the new N100 Automated Teller Machine charge applies on withdrawals of N20,000 or less
- It said banks that limit customers from withdrawing up to N20,000 will be sanctioned appropriately
- The CBN banks can’t charge more than N500 per N20,000 surcharge
The Central Bank of Nigeria (CBN) has clarified the newly reviewed N100 Automated Teller Machine (ATM) charge for cash withdrawals at another bank’s ATM (Not-On-Us transactions), saying the fee applies on withdrawal amounts of up to N20,000 or less.
The CBN explained this in a Frequently Asked Questions (FAQs) document on the review of ATM transaction fees posted on its official X page on Thursday, February 13.
It explained that applying the fee for every N20,000 withdrawal is to prevent customers from being compelled to break their withdrawals into smaller amounts.
The apex bank added that a tiered fee structure will apply for transactions above N20,000, with an additional N100 charged for each subsequent withdrawal of N20,000 or a portion thereof.
“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 to less than N20,000 per transaction.
“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 portion thereof,” it stated.
Sanctions for banks limiting N20,000 withdrawal
The CBN also stated that banks are required to allow customers with sufficient funds to withdraw up to N20,000 per transaction.
It added that banks that contravene this would be sanctioned appropriately.
The apex bank also encouraged consumers who are denied the right to withdraw up to N20,000 per transaction to file a complaint with the CBN via cpd@cbn.gov.ng.
The CBN stated, “Any bank that compels a customer with sufficient funds in her account to withdraw less than N20,000 per transaction against the customer’s desire for a higher sum would be contravening this regulation’s spirit and sanctioned appropriately.”
Banks can’t charge more than N500 per N20,000 surcharge
The CBN noted that banks and other financial institutions are not allowed to charge more than the N500 per N20,000 surcharge for an off-site ATM withdrawal as prescribed in the earlier circular.
It said, “No. the charges and surcharges are capped. Thus, banks and other financial institutions are not allowed to charge more than the fees prescribed in the circular.
“Note also that though the surcharge per transaction is capped, there is flexibility for a bank to charge a lower amount depending on its cost structure and business development drive.”
The apex bank further stated that these fees will be displayed at the point of withdrawal, allowing customers to make informed decisions before proceeding with the transaction.
For withdrawals outside Nigeria, the CBN stated that banks will apply a cost recovery fee. This means that the exact charge imposed by the international ATM acquirer will be passed on to the customer.
Explanation of on-site and off-site ATMs
In the FAQ document, the CBN also explained the difference between on-site and off-site ATMs. It stated that on-site ATMs are located within or directly affiliated with a bank branch, while off-site ATMs are found in locations such as shopping malls, fuel stations, or other public areas.
CBN eliminated three free monthly ATM withdrawals
Recall that on Monday, February 10, the CBN announced the elimination of the three free monthly withdrawals previously allowed for customers using other banks’ ATMs.
In a circular announcing the new policy, the CBN directed all banks and financial institutions to implement new ATM withdrawal charges from March 1, 2025.
The directive means that customers will pay for every withdrawal made from another bank’s ATM, while withdrawals made from a customer’s bank ATM will remain free.
The new policy on ATM charges comes after the CBN warned of sanctions against any bank that refused to dispense cash via ATMs.
The directive aimed to ensure cash availability, especially during the festive season, prevent cash hoarding and halt the illicit flow of minted banknotes to currency hawkers and economic agents that commodify naira banknotes.
Already, banks have begun implementing the directive, even as the CBN fined nine banks N150 million each for failing to make cash available via their Automated Teller Machines (ATMs).
CBN to start fining banks over cash scarcity at ATMs
Meanwhile, TheRadar earlier reported that the Central Bank of Nigeria (CBN) issued a stern warning to financial institutions over the ongoing cash scarcity at Automated Teller Machines (ATMs) across the country.
CBN governor, Olayemi Cardoso, announced that penalties would be imposed on erring banks and other financial players during his address at the annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria on Friday, November 29.
