CBN Confirms N100 Fee for ATM Withdrawals Below N20,000 from Other Banks, in A Policy Expected to Shift Banking Habits

The Central Bank of Nigeria (CBN) has confirmed that Nigerians withdrawing less than N20,000 from an Automated Teller Machine (ATM) belonging to a different bank will still be charged an N100 fee per transaction.

This policy, which is set to take effect from March 1, 2025, is expected to alter the way Nigerians access cash, with many likely to adjust their banking habits to avoid the extra charges.

This clarification came through an FAQ document published on the CBN’s website on Thursday, addressing concerns raised after the February 10, 2025, circular announcing revised banking charges. The document explained that while withdrawals from a customer’s own bank’s ATM remain free, those made from another bank’s ATM will attract an N100 fee, even for amounts below N20,000.

The new charges apply to all interbank ATM transactions, meaning customers can no longer enjoy the three free withdrawals per month that were previously allowed. Additionally, off-site ATMs (such as those in shopping malls and fuel stations) will incur an extra surcharge of up to N500 per transaction, further increasing costs for bank customers.

Beyond the N100 charge for withdrawals below N20,000, a tiered fee structure has also been introduced, ensuring that larger withdrawals attract even higher charges. Customers withdrawing more than N20,000 from another bank’s ATM will be charged an extra N100 for every additional N20,000 withdrawn.

For example:

• Withdrawing N40,000 from another bank’s ATM will cost N200 in fees.
• Withdrawing N60,000 will cost N300.
• Withdrawing N100,000 will cost N500.

Additionally, for customers using international ATMs, withdrawal fees will be based on cost recovery, meaning they will be charged exactly what the international service provider applies.

Nigerians Expected to Change ATM Usage Patterns

The policy is widely expected to alter how Nigerians withdraw cash, as many customers may choose to avoid interbank ATMs altogether to escape the additional charges.

Banking analysts predict that many customers will now rely more on:

1. Withdrawing cash over the counter at their banks’ branches instead of using ATMs.
2. Using only their own bank’s ATMs, even if it means walking long distances or standing in longer queues.
3. Withdrawing larger sums at once, rather than making multiple withdrawals over time, to minimize repeated charges.

Financial analysts believe that the policy will likely create congestion in bank halls because many customers will now prefer counter withdrawals to avoid the charges, and this will also lead to fewer ATM transactions, as people will now plan their withdrawals more carefully.

There are also concerns that rural areas and smaller towns—which often have fewer ATMs per bank—will face difficulties since customers might not have easy access to their bank’s ATMs. This could force them into paying higher fees or going long distances just to withdraw money at their own bank’s ATM.

The new policy disproportionately affects low-income earners, who often withdraw smaller amounts for daily expenses. Paying N100 on an N5,000 or N10,000 withdrawal is seen as a significant burden compared to higher earners who typically withdraw larger sums at once.

CBN Defends Policy, Warns Against Overcharging

However, the CBN has defended the new charges, saying they are intended to discourage unnecessary multiple withdrawals and encourage the use of digital payment channels.

To prevent exploitation, the CBN has warned that banks must not charge beyond the prescribed fees and should not manipulate ATM machines to force customers into making multiple small withdrawals. Customers who suspect foul play have been advised to report such cases to the CBN Consumer Protection Department via cpd@cbn.gov.ng.

Will the Policy Push More Nigerians to Digital Banking?

The CBN has been pushing for a cashless economy, and some experts believe this policy is another step in that direction. However, with frequent network failures and slow adoption of digital payments, many Nigerians still rely heavily on cash, making this policy an added financial strain rather than a technological shift.

With less than a month before implementation, bank customers across Nigeria are now reconsidering their ATM usage patterns, as the policy threatens to make accessing their own money more expensive than ever before.