The decision of the Central Bank of Nigeria (CBN) to impose charges on cash withdrawal by customers from Automated Teller Machines (ATMs) of banks other than theirs has continued to generate mixed feelings among many Nigerians......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
Since the introduction of ATM in Nigeria in the early 1990s, it has revolutionised cash withdrawals, offering 24/7 access to money without the hassle of entering a bank hall.
The story of ATMs, which were once symbols of banking convenience, changed drastically after the CBN’s naira redesign policy in late 2022. The move, which sought to limit cash circulation and encourage a cashless economy, led to a severe cash crunch.
Even after the federal government reversed the Naira redesign and returned the old notes into circulation, ATMs and point-of-sale (POS) remained extremely reliable for Nigerians needing cash, ‘leaving the banking hall empty’.
However, the review of ATM transaction fees effective from March 1, 2025, could push Nigerians to return to the practice of withdrawing inside the banking hall.
According to the CBN circular issued on Tuesday, February 11, customers withdrawing from other banks’ ATMs will incur a charge of ₦100 per ₦20,000, with additional charges of up to ₦500 for off-site ATMs.
CBN Defends New ATM Charges
Amidst the uproar on removing three free monthly withdrawals previously allowed for such transactions, CBN stated that its new policy benefits both banks and customers.
CBN’s Acting Director, Financial Policy and Regulation Department, John Onojah, while speaking on Channels Television’s Sunrise programme, assured Nigerians that the issue of cash shortages at ATMs would be addressed under the new policy.
He explained that the policy aims to help banks recover the high costs of deploying and maintaining ATMs.
SERAP To Sue CBN
In its reaction to the new policy, the Socio-Economic Rights and Accountability Project (SERAP) described it as unlawful, unfair, unreasonable, and unjust.
In a statement issued on Sunday by SERAP Deputy Director, Kolawole Oluwadare, the organisation urged CBN Governor, Olayemi Cardoso, to reverse the policy immediately or face legal action.
The organisation argued that it would worsen the financial hardship faced by Nigerians, particularly low-income earners.
SERAP contended that the increase contradicts Section 42(1)(a) of the CBN Act 2007, which mandates the apex bank to ensure adequate and reasonable financial services for the public in the national interest.
Do Nigerians Really Need Cash In All Transactions?
In an interview with Naija News, a Senior Manager at a top Nigerian Commercial bank, Identified as Seyi, described the CBN policy as a right step in the right direction and urged Nigerians to de-emphasise the use of cash for transactions.
He said, “The policy offers options to customers, if you do not want to use ATM, you can go to the banking hall during banking hours to withdrawal. I understand there can be pressing need for cash during non-banking hours then customers can resort to use of online banking. It will not return crowd to the banking hall because the volume of trantactions will not really change. The questions Nigerians should be asking is, do we really have to use cash in all our transactions? The answer is no, for instance when a customer does 30 transactions in a month, how many of those transactions takes place in the banking Hall?
“I cannot remember the last time I withdraw money from the ATM, that does not mean I am not spending, I use my card to make transfer or use online banking. Those are the areas that I think Nigerians should be concern about. We need to de-emphasise the use of cash and there are lots of channels that can be explored that you do not necessarily have to use cash. A friend of mine told me he just renewed his rent of about N4.5 million, will such person go to the bank for cash to pay that kind of money?”
When asked if the policy will benefit banks and customers, Seyi said, “I do not want to say it will be beneficial to both the bank and customers because there are many channels to explore and the idea of cash will be de-emphasised. Not all transactions of customers must be on cash, pay school fees, go shopping, make payment in mall and many others. There are lots of options to make payment. Nigerians should de-emphasise the use of cash of course, we cannot completely eradicate it.”
With the new policy, the days of walking up to any bank ATM and effortlessly withdrawing cash are gone and considering the trend of empty ATMs in some banks, Nigerians are left with no choice but to pay extra at POS stands.