CBN Ends Free ATM Withdrawals: Charges up to ₦500 Per Withdrawal

The Central Bank of Nigeria (CBN) has introduced a new Automated Teller Machine (ATM) withdrawal fee putting an end to the three (3) free monthly withdrawals previously granted to customers using other banks' ATMs. The new policy by CBN is a move that will significantly impact bank customers nationwide, as all interbank ATM withdrawals will now attract charges. This change according to the CBN aims to cover rising operational costs and improve the efficiency of ATM services in the country.

Summary of Key Changes in ATM Withdrawal Charges

• No More Free Withdrawals: From March 1, 2025, bank customers will now be charged from the first withdrawal when using another bank’s ATM.
• Increased Fees: Withdrawals from other bank’s ATMs will attract a ₦100 charge per ₦20,000 withdrawal, along with a possible ₦450 surcharge for some transactions.
• Bank Branch ATM Charges: Withdrawals from ATMs located at bank branches will also cost ₦100 per ₦20,000 withdrawn.
• Same Bank Withdrawals Remain Free: Customers using ATMs of their own bank will not be charged.
• Off-Site ATMs: Withdrawals from ATMs located outside bank premises will attract an additional surcharge of up to ₦500.
• International Withdrawals: The charge for international ATM withdrawals will be based on the exact amount imposed by the international acquirer.

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Why Is CBN Implementing This Policy?

While the CBN has not provided a detailed explanation, the move aligns with its ongoing efforts to promote a cashless economy. Other possible justifications include:

• Increasing Banking Revenue: Banks may be facing higher operational costs in maintaining ATM networks.
• Encouraging Cashless Transactions: The CBN has been pushing for a cashless economy, promoting electronic payments over cash withdrawals.
• Addressing Economic Challenges: Rising inflation and economic instability may have influenced the decision to impose higher charges.
• Improving Financial Inclusion and Reducing Cash Dependence: Encouraging Nigerians to rely more on digital transactions instead of cash. 
• Cutting Banking Costs: Banks spend a lot of money maintaining ATMs and handling cash, and this policy may help reduce those costs.

Impact on Nigerians

1. Higher Banking Costs: Customers who frequently use ATMs from different banks will now incur additional expenses.
2. Reduced Convenience: Many Nigerians may avoid ATMs of other banks to save money, potentially causing congestion at their own bank’s ATMs.
3. Shift to Digital Banking: More people may turn to mobile banking apps, USSD transfers, and Point of Sale (POS) services to avoid withdrawal fees.

What You Can Do to Avoid These Charges

1. Use Your Bank’s ATM: Stick to ATMs belonging to your bank whenever possible.
2. Withdraw Larger Amounts Less Frequently: Instead of making multiple small withdrawals, take out a lump sum to minimize charges.
3. Go Cashless: Embrace cashless transactions by using your debit or credit cards for purchases, or opt for digital payment platforms like mobile wallets or online banking. This will not only save you from ATM fees but also provide a more convenient and secure way to make transactions.

Final Thought

The removal of free ATM withdrawals marks a significant shift in Nigeria’s banking landscape. While this move may help banks manage operational costs, it places an extra financial burden on already burdened customers. As Nigerians adjust, adopting smarter banking habits and digital payment solutions will be crucial in minimizing unnecessary expenses.

What do you think about this new CBN policy? Share your thoughts in the comments below and please share.