The Central Bank of Nigeria’s (CBN) decision to implement new Automated Teller Machine (ATM) withdrawal charges, effective March 1, 2025, has sparked widespread dissatisfaction among bank customers.
Under the revised fee structure, customers are now required to pay N100 for every N20,000 withdrawal from on-site ATMs of other banks and a staggering N600 for off-site ATM transactions.
While the CBN justifies this move as necessary to cover rising operational costs and improve ATM efficiency, the policy has been met with fierce criticism from Nigerians already grappling with a harsh economic climate.
This decision, though framed as a step toward modernising the banking sector, risks further alienating ordinary citizens and deepening financial exclusion.
The CBN’s circular, issued on February 10, 2025, outlines the new charges as part of efforts to accelerate the deployment of ATMs across the country and ensure that financial institutions appropriately charge customers for services rendered.
However, in our opinion, the timing and rationale behind this policy raise serious questions about its alignment with the realities faced by the average Nigerian.
In a nation where millions struggle to make ends meet, the imposition of additional fees on essential banking services feels like a punitive measure rather than a progressive reform.
The new ATM charges come at a time when Nigerians are already burdened by skyrocketing inflation, stagnant wages, and a cost-of-living crisis. For many, accessing cash through ATMs is not a luxury but a necessity, particularly in rural areas where digital banking infrastructure remains underdeveloped.
The introduction of these fees disproportionately affects low-income earners, who often rely on cash transactions for their daily needs. While the CBN argues that the policy aims to promote digital banking and reduce reliance on cash, it fails to address the systemic barriers that prevent many Nigerians from fully embracing digital alternatives.
For instance, poor internet connectivity, limited access to smartphones, and low levels of financial literacy continue to hinder the adoption of mobile and internet banking in many parts of the country. By increasing the cost of ATM withdrawals, the CBN risks pushing more people toward informal financial systems, thereby undermining its own goal of financial inclusion.
This policy, rather than fostering efficiency, may inadvertently exacerbate the very problems it seeks to solve.
The Socio-Economic Rights and Accountability Project (SERAP) has rightly challenged the legality of the ATM fee hike, filing a lawsuit against the CBN and urging President Bola Tinubu to suspend the policy pending the court’s decision. SERAP’s argument that the implementation of these fees while the case is still pending undermines the rule of law is both valid and compelling.
The CBN, as a regulatory body, has a responsibility to uphold the principles of fairness and transparency in its operations. Rushing to enforce a policy that is under legal scrutiny not only erodes public trust but also sets a dangerous precedent for governance.
Moreover, the ethical implications of this decision cannot be ignored. At a time when many Nigerians are struggling to afford basic necessities, imposing additional financial burdens on them is both insensitive and counterproductive.
The CBN’s claim that the fees are necessary to cover rising operational costs rings hollow when juxtaposed against the record profits reported by many commercial banks in recent years.
In the considered opinion of this newspaper,If the goal is to improve ATM efficiency, why should the burden fall solely on customers rather than being shared by the financial institutions that stand to benefit from increased usage?
The CBN’s decision to hike ATM charges reflects a broader pattern of policymaking that prioritizes macroeconomic objectives over the lived experiences of ordinary citizens.
While the regulator’s efforts to promote digital banking and reduce cash dependency are commendable, they must be accompanied by measures that address the structural inequalities within the financial system.
For example, investing in digital literacy programs, expanding internet access, and incentivizing banks to deploy ATMs in underserved areas would go a long way toward achieving the CBN’s stated goals without penalizing customers.
As the backlash against the new ATM charges continues to grow, the CBN must reconsider its approach and take steps to mitigate the adverse effects of this policy.
We strongly suggest suspending the implementation of the fees pending the outcome of SERAP’s lawsuit would be a prudent first step. Additionally, the CBN should explore alternative funding mechanisms for improving ATM efficiency, such as partnerships with private sector players or the reallocation of existing resources within the banking sector.
In the long term, the CBN must adopt a more holistic approach to financial sector reform—one that balances the need for efficiency with the imperative of inclusivity. This can be done by addressing the root causes of financial exclusion .After all, a banking system that places undue burdens on its customers is one that ultimately fails in its mission to serve the public good.
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