CBN Scraps Free ATM Withdrawals, Introduces New Charges: Bank Customers Express Concerns

In a recent move by the Central Bank of Nigeria (CBN), the institution has announced the scrapping of free ATM withdrawals on other banks’ Automated Teller Machines (ATMs), alongside the introduction of new charges. As per the new policy, customers will now incur a fee of N100 for every N20,000 withdrawal made using another bank’s ATM. Additionally, transactions at off-site ATMs will incur a surcharge of up to N500. These changes are set to take effect from March 1, 2025. The CBN emphasized that withdrawals at a customer’s own bank’s ATM will still remain free of charge.

The new policy follows a circular issued by the CBN, which also confirmed the removal of the three free monthly ATM withdrawals that were previously allowed when using ATMs of different banks. The CBN cited rising operational costs and the need to improve the efficiency of ATM services as the rationale behind the revision of the charges. Moreover, international ATM withdrawals will be charged based on the rates set by international acquirers.

The move has met with backlash from some bank customers who voiced their discontent with the new charges. Dr. Uju Ogubunka, the Chairman of the Bank Customers Association of Nigeria, acknowledged the rise in fees but expressed concerns about the extent of the increase. He noted that while fee hikes across various sectors have become common due to the state of the economy, it’s essential to assess whether these increases are reasonable and affordable for Nigerians, especially at this time.

Meanwhile, financial analysts have also criticized the CBN’s decision, with Segun Aremu warning that the policy could negatively affect the Central Bank’s financial inclusion efforts. He pointed out that many Nigerians, particularly those in underserved areas with limited access to banks, would be disproportionately impacted by the new charges, especially low-income earners who frequently make withdrawals of N10,000 to N20,000. According to Aremu, this policy may force people to rely more on electronic banking, but the country has not yet fully transitioned to mobile banking solutions.

On social media platforms, many Nigerians have voiced their frustrations over the new charges. Users have expressed concerns that the policy could harm lower and middle-income earners, with some users accusing the government of placing excessive burdens on citizens while encouraging cashless transactions. The rising dissatisfaction suggests that many are apprehensive about how the new charges will affect their daily banking practices and the broader economy.

Source: BUSINESS DAY