CBN Maintains N100 Charge for ATM Withdrawals Under N20,000

The Central Bank of Nigeria (CBN) has made a noteworthy announcement concerning ATM withdrawal fees that will take effect starting March 1, 2025. Specifically, customers who utilize Automated Teller Machines (ATMs) owned by banks other than their own will incur a fee of N100 for each transaction when withdrawing amounts that are less than N20,000.

Under the newly set fee structure, withdrawals from ATMs operated by the customer’s own bank will remain free of any transaction fees. However, for withdrawals conducted through the ATMs of different banking institutions, the stipulation of a N100 fee will be applied to transactions involving amounts of N20,000 or less. This charge will be applicable specifically for transactions occurring at on-site ATMs, which are typically located within or directly associated with a physical bank branch.

The rationale behind implementing a fee for withdrawals below the N20,000 threshold is to discourage customers from fragmenting their withdrawals into smaller amounts solely to evade incurring transaction fees. In the FAQ document, the CBN explicitly stated, “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 intention here is to prevent individuals from being tempted to break their withdrawals into smaller denominations, which could lead to an increase in transaction volumes and subsequently higher cumulative fees.

In addition to this adjustment, the revised fee structure will also introduce a tiered approach for larger withdrawals. For customers who decide to withdraw amounts exceeding N20,000 from another bank’s ATM, an additional N100 fee will be charged for every subsequent portion of N20,000 withdrawn. For example, if an individual withdraws N60,000 from an ATM of a different bank, they will be charged the initial N100 for the first N20,000, another N100 for the second N20,000, and an additional N100 for the third N20,000, resulting in a total fee of N300.

Importantly, the previous provision allowing for three free monthly withdrawals from ATMs belonging to other banks will be completely eliminated starting March 1, 2025. This change is likely to have significant implications for customers who habitually rely on ATMs outside of their primary banking institution, potentially leading to increased transactional costs.

The Central Bank has reaffirmed its position that financial institutions must adhere strictly to the prescribed fee structures and cannot impose charges that exceed these limits. Additionally, banks are given the latitude to reduce fees based on their own operational strategies should they choose to do so. However, any institutions found to be in breach of these directives will be subject to penalties. This includes instances where banks may attempt to compel customers to withdraw less than N20,000 at a time, despite sufficient funds being available in their accounts.

To protect the interests of consumers, the CBN has encouraged individuals who experience issues regarding the withdrawal limits to lodge complaints directly with their Consumer Protection Department via the provided email address, cpd@cbn.gov.ng. To optimize their withdrawal costs, the CBN advises customers to prioritize using their own bank’s ATMs. Additionally, the bank has recommended that customers explore alternative financial solutions such as mobile banking applications, Point-of-Sale (POS) transactions, and electronic funds transfers to diminish their dependency on cash withdrawals and the associated fees.