CBN Must Rethink Its New ATM Withdrawal Policy
By Tahir Ahmad
The Central Bank of Nigeria (CBN) recently implemented its revised ATM withdrawal charges, a move that has sparked widespread frustration among Nigerians. Under the new policy, which took effect on March 1, 2025, bank customers are now required to pay ₦100 for cash withdrawals up to ₦20,000 from ATMs not operated by their banks.
In addition to this, off-site ATMs—those not located within bank premises—attract an extra surcharge of up to ₦500 per transaction. While the CBN defends these charges as a means to encourage banks to improve cash availability at ATMs, the reality on the ground tells a different story.
Rather than benefiting Nigerians, the policy appears to place additional financial strain on citizens already struggling with economic hardships. Nigerians have long faced the problem of inaccessible cash at ATMs, with many forced to rely on Point-of-Sale (POS) operators to meet their cash needs.
Over time, POS transactions have become the default withdrawal method for millions, not by choice but by necessity. The primary reason behind this shift is that bank ATMs are often empty, leaving customers with no option but to patronize POS operators, who, in turn, impose their own withdrawal charges.
There is a growing perception that banks deliberately keep their ATMs understocked because they find it more profitable to supply cash to POS operators instead. Rather than addressing this fundamental issue, the CBN’s policy effectively forces people to pay even more for an already broken system.
This development is particularly worrisome for rural dwellers, where banking infrastructure remains inadequate. In many small towns and villages, bank branches are few and far between, and ATMs are either non-existent or rarely functional.
The absence of reliable alternatives means that rural Nigerians rely heavily on POS operators for cash transactions. By making withdrawals more expensive, the CBN is further marginalizing those who already have limited access to formal financial services.
At a time when digital banking remains unreliable due to poor internet connectivity and power supply issues, this policy does more harm than good. Instead of promoting financial inclusion, it effectively pushes many Nigerians further away from the formal banking system.
The CBN’s justification for the new withdrawal charges is centered on the claim that it will encourage banks to maintain better cash availability at their ATMs and discourage the hoarding of cash outside the banking system.
However, previous increases in service charges across different sectors, including electricity tariffs and telecommunications fees, have not led to any notable improvements in service delivery. There is little reason to believe that this new policy will be any different. The fear among many.
Nigerians is that, rather than compelling banks to serve their customers better, the policy will simply allow them to generate more revenue while ordinary citizens bear the brunt of higher transaction costs.
If the CBN genuinely seeks to improve the efficiency of cash withdrawals in the country, it must begin by ensuring that banks make money readily available at their ATMs. Withdrawal charges should not be used as a tool to compel customers to adopt cashless transactions when the infrastructure to support such a transition remains weak.
The ideal solution would be for the CBN to place stricter regulations on banks to ensure they prioritize ATM cash supply instead of using it as a business opportunity to profit from POS transactions. Additionally, before implementing any financial policies that directly impact ordinary citizens, the CBN should conduct a thorough assessment of how they will affect different segments of society, particularly those in rural areas who have limited banking access.
Rather than adding to the financial burdens of Nigerians, the CBN should focus on policies that enhance financial accessibility and ease of banking. The current withdrawal charges only serve as an unjust tax on people who simply want to access their own money.
Until banks can guarantee efficient service delivery and ensure that ATMs are sufficiently stocked, this policy should be reconsidered. Banking should be about service, not exploitation, and any policy that disproportionately impacts the most vulnerable must be called into question.
Tahir Ahmad is a corps member with PRNigeria Centre, Abuja. Email: [email protected].
