CBN warns Banks against limiting customers’ withdrawal to N20,000 at ATMs

The Central Bank of Nigeria (CBN) has issued a stern warning to banks, cautioning them against compelling customers to withdraw amounts lower than N20,000 per transaction at Automated Teller Machines (ATMs). The apex bank stated that any financial institution found violating this directive would face sanctions.

This warning was contained in a “Question and Answer” explainer released on Thursday in response to concerns arising from the recent review of ATM withdrawal fees.

A few days ago, the CBN scrapped the long-standing policy that allowed customers to make three free withdrawals per month from ATMs of other banks.

Under the new rule, withdrawals from ATMs not belonging to the customer’s bank will now attract charges—N100 per N20,000 transaction for on-site ATMs and up to N500 for off-site machines.

Clarifying the new policy, the CBN emphasized that ATM withdrawal charges for non-bank ATMs are structured around the expectation that customers can withdraw up to N20,000 per transaction.

“Any bank that compels a customer with sufficient funds in their account to withdraw less than N20,000 per transaction, against their desire for a higher sum, would be contravening this regulation and will be sanctioned appropriately,” the statement read.

To address violations, the CBN has directed affected customers to file complaints against banks that impose unnecessary restrictions.

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“Consumers denied the right to withdraw up to N20,000 per transaction are encouraged to file a complaint with the CBN using [email protected],” the apex bank advised.

Furthermore, the CBN clarified that banks must not charge more than the prescribed ATM fees, though they are allowed to charge lower fees depending on their cost structure and business model.

“The charges and surcharges are capped, meaning banks and other financial institutions cannot charge more than the fees stated in the circular. However, a bank can charge a lower amount depending on its cost structure and business development drive,” the CBN stated.

To avoid incurring additional fees, the apex bank recommended that customers withdraw cash from their own bank’s ATMs whenever possible.

The new ATM withdrawal policy has sparked mixed reactions from bank customers, with many expressing concerns over increased transaction costs.

However, the CBN insists that the changes are aimed at improving efficiency and ensuring fair banking practices across the industry.