CBN Threatens Sanctions Against Banks Limiting ATM Withdrawals Below N20,000

The Central Bank of Nigeria (CBN) has warned that it will sanction any bank that restricts Automated Teller Machine (ATM) withdrawals to less than N20,000 per transaction, emphasizing the importance of adhering to its updated withdrawal fee guidelines.

This was disclosed in a document issued by the apex bank to address widespread concerns following the recent review of ATM withdrawal charges.

Recall that the CBN, on Tuesday, announced an increase in ATM withdrawal fees, stating that from March 1, 2024, bank customers will be charged N100 for every N20,000 withdrawal made at another bank’s on-site ATM.

In a circular addressed to banks and financial institutions, the CBN clarified that withdrawals from a customer’s own bank’s ATM (On-Us transactions) would remain free of charge. However, withdrawals from other banks’ ATMs (Not-On-Us transactions) will attract a N100 fee for on-site ATMs and an additional surcharge of up to N500 for off-site ATMs per N20,000 withdrawal. Charges for international withdrawals will reflect exact costs imposed by international acquirers.

The apex bank emphasized that the previous provision of three free monthly withdrawals from other banks’ ATMs would no longer apply from March 1.

Responding to public concerns about withdrawal limits imposed by some banks, the CBN issued a Frequently Asked Questions (FAQ) document to clarify the new charges, reiterating that banks must allow customers to withdraw up to N20,000 per transaction if sufficient funds are available. Any bank failing to comply will face regulatory sanctions.

The CBN urged customers who encounter such restrictions to file complaints via cpd@cbn.gov.ng.

Additionally, the apex bank highlighted that while the new charges are capped, banks have the flexibility to charge lower fees depending on their cost structures. To avoid transaction fees, the CBN advised customers to use their own bank’s ATMs and minimize the use of off-site ATMs. It also encouraged the use of alternative payment channels such as mobile apps and POS devices.

This development underscores the CBN’s commitment to ensuring fair banking practices while promoting cashless transactions across the country.