E-Financial
CBN, CPC Look Elsewhere as Banks Milk Nigerians through ATMs
Stephen Ubimago, law editor at the Independent newspapers has asked the Central Bank of Nigerian (CBN) and the Consumer Protection Council of Nigeria (CPC) to act and stop needless extortion of ATM users in Nigeria.
Ubimago, said that that banks have continued to programme their ATMs in such a way as to extort users of the machines, while the CBN has simply been aloof.
Because the closest deposit money bank to where Babatunde Ajiri, a furniture-maker, has his workshop and showroom is the Sterling Bank branch along the Sango-Ogbayo Road, in Ogun State, he had often made withdrawals from his First Bank account using the Automated Teller Machines (ATM) at the said Sterling Bank branch.
To be sure, he is usually charged N65 on his third withdrawal transaction from the Bank’s ATM using his First Bank debit card.
Ordinarily, a user is charged for what the Central Bank of Nigeria (CBN) calls an “extended use of other banks’ ATMs,” unlike when he uses the ATM of his own bank.
According to reports, the said N65 is a fee meant for, among other things, the maintenance of the machines.
But the disturbing part of the story is that from the said Sterling Bank ATM, a user cannot withdraw more than N10, 000 in one transaction.
Thus for a withdrawal of N30, 000, a user must make three transactions. This means that for those three transactions on the machine, he will be charged the statutory N65; and for a N100, 000-withdrawal, an excessive N195 is charged. This is a rip-off, to state the least.
As such, Ajiri has practically stopped using the said Sterling Bank’s ATM, save on occasions when he is withdrawing small sums.
He now prefers journeying all the way to Sango just to access any of the ATMs of the First Bank branch located there, for at least he wouldn’t be charged so extortionately except the sum of N50 once in a month, which is fair enough.
According to Ubimago, to state that the said Sterling Bank branch is making a kill from programming its ATMs to only dispense such atomistic sum is to state the obvious.
And the fact that the bank is the only major financial institution operating in the Ijoko- Ota area means it is operating in a niche environment or indeed like a monopoly.
However, from most banks’ ATM a user could withdraw at a go N20,000 – meaning that before the N65 statutory fee could be charged on his account (that is, if he is not a customer of the bank), he must have withdrawn at least N60,000. This is also fair.
Therefore, for ATM users like Ajiri, the problem is not the N65 charge upon every third withdrawal transaction on another bank’s ATM; but the fact that it appears the CBN does not seem to regulate the banks in terms of how they programme their ATMs to dispense cash.
And Ajiri’s story is not isolated.
Miss Agatha Young, a First Bank customer and Abuja resident, narrating a similar experience said, “I live in Kubwa, and almost all banks’ ATMs in my area dispense maximum of N10, 000.
“Recently, I needed to withdraw N200,000 and my bank’s ATM was crowded, so I went to use another bank’s ATM only to discover that the machine was dispensing only N10,000 per transaction.
“I was only able to withdraw N150, 000 because other customers were waiting on the queue and I was tired of going through the same process.
“I also discovered I was charged so much for those transactions as I had exceeded three withdrawal limit using the other bank’s ATM, which is outrageous.’’
Another user, Sunday Mgbede, a Guarantee Trust Bank customer, residing in Nyanya, another Abuja suburb, said most of the ATMs in his area dispensed maximum of N10, 000 per transaction.
“If you want to make withdrawals at weekends around the Nyanya/Mararaba axis, you will discover that only few ATMs are dispensing over N10, 000 per transaction,” he said.
“The concerned authorities should please look into this matter because people are suffering, there is no money in the country, yet banks want to make profit off customers.”
Another customer of First Bank, Erica Jonah, said she used her ATM card to withdraw N100,000 from another bank and discovered the machine was programmed to dispense N10,000 per transaction and was charged N65 per transaction.
Jonah said that was not her first experience, describing the practice by banks involved as fraudulent.
It is in light of the foregoing that the Senate on Wednesday, October 17, last year, asked its committees on Banking, Insurance & other Financial Institutions and Finance to invite Mr Godwin Emefiele, the CBN Governor, to explain why its approved official charges are skewed in favour of banks as against ordinary bank customers.
The committees are also to investigate the propriety of ATM Card maintenance charges in comparison with international best practices and report back to the Senate.
These resolutions were sequel to a motion sponsored by Gbenga Ashafa (APC, Lagos East) on “Illicit and Excessive Charges by Nigerian Banks on customers account with particular focus on Automated Teller Machine (ATM) Maintenance and Withdrawal Charges.”
Ashafa noted there have been several complaints from Nigerians generally and on social media concerning illicit and excessive charges by commercial banks on customers’ account with particular focus on ATM maintenance charges and ATM withdrawal charges.
It would be recalled that the CBN in 2017 increased the maintenance fees charged by banks on debit and credit card maintenance from N100 a year to N50 per month (N600 a year) as contained in its “Guide to Charges by Banks and other Financial Institutions.”
Ashafa also expressed worry that most banks have deliberately manipulated their ATM not to dispense more that N10,000 per withdrawal in some cases and in most cases not more than N20,000.
“This is a deliberate ploy to manipulate the ATM machines which are ordinarily manufactured to dispense as much as N40,000 per transaction, in order to attract more bank charges from customers who are forced to carry out more transactions due to the manipulated machines,” Ashafa said on the occasion.
“It appears the CBN is becoming insensitive to the plight of Nigerians who are already complaining of excessive charges by commercial banks. If the CBN is trying to encourage a cashless Nigeria, why should they be making it more difficult and expensive for Nigerians to do transactions.”
In his contribution, Ike Ekweremadu, the Deputy Senate President, urged the CBN to live up to its responsibility of protecting the interests of Nigerians and not just the banks.
He also chided the Consumer Protection Council (CPC) for not “living to expectation,” calling on the institutions to wake up to its responsibility of protecting the interest of customers.
The Senate, thereafter, urged banks to allow N40, 000 maximum per withdrawal through an ATM and not N10, 000.
Despite these and other resolutions passed by the Senate, the banks have been defiant.
The CBN and CPC must therefore urgently act to rein in this needless exploitation of Nigerians in the name of ATM maintenance charges; otherwise the leadership of these institutions should resign.
Nigeria Insurance Deposit Corporation (NDIC) has guaranteed customers of insured commercial banks prompt recovery of their deposits in the event of risk liability or liquidation.
In addition, the corporation assured depositors of its statutory mandate, which includes supervising banks for risk assessment, ensuring ethical standards, and enhancing financial stability in the country.
Mrs Emily Osuji, executive director, Corporate Services, NDIC, gave the assurance during a Stakeholders Town Hall Meeting on customer protection regarding bank charges and deposits in Kano.
Mrs Osuji posited that the NDIC has, in recent times, demonstrated a strong commitment to protecting the hard-earned savings of Nigerians and sustaining confidence in the banking system.
She cited the cases of defunct Heritage Bank Limited, Union Homes Plc and Aso Savings and Loans Plc, where depositors received their deposits promptly after meeting the relevant requirements.
The NDIC boss, however, reminded customers to link their Bank Verification Number (BVN) as a unique identifier to locate their alternate accounts, where their claims will be transferred.
The executive director affirmed that NDIC has expanded coverage to protect about 99 per cent of depositors in Nigeria, a deliberate policy aimed at protecting small savers, promoting financial inclusion, and enhancing trust in the banking sector.
She said, “The corporation fulfils its role through its core mandates of deposit guarantee, bank supervision, distress resolution and bank liquidation, all of which are geared towards protecting the hard-earned savings of Nigerians and sustaining confidence in the banking system.
“Our strapline, ‘Protecting your bank deposits!’, is more than mere words for us. We stand by this statement as a firm commitment to our mandate of ensuring that depositors have access to their hard-earned savings in the event of bank failure.
“This is a critical responsibility that we do not take lightly. This is especially so in times of financial uncertainty and distress, with the NDIC standing as a pillar of safety and reassurance for depositors, particularly the most vulnerable.”
Speaking on the concept of stakeholder engagement, Hawwau Gambo, head of Communication and Public Affairs, said the corporation was compelled to provide clarity, build trust and strengthen depositor confidence amid misconceptions.
Gambo noted that the recent revocation of the operating licences of some banks by the Central Bank of Nigeria, (CBN) and the current public discourse on banks’ recapitalisation efforts have reinforced the need for sustained stakeholder engagement.
She reminded that sustained awareness is pertinent to dust, given already heightened public interest and featured public confidence in the financial institutions.
“NDIC’s last Public Awareness Survey highlighted the need to enhance interpersonal communication channels to improve public understanding of deposit insurance. It is against this backdrop that the Stakeholders’ Town Hall Meetings were conceived as a structured, interactive platform for dialogue, education and feedback,” Gambo noted.
The Central Bank of Nigeria in its 2025 Fintech Policy Insight Report, has raised concern over Nigeria’s fintech sector heavily dependent on foreign investment, exposing it to swings in global markets.
The report said the sector has shown resilience despite global economic pressures, but warned that reliance on external capital leaves it vulnerable to market fluctuations.
It would be recalled that startups in the country raised $520m in equity funding in 2024, down from about $747m in 2019, when Nigeria captured roughly 37 per cent of all African startup investment.
This performance, amid significant global macroeconomic gyrations, underscores Nigeria’s position as a key hub for financial innovation. The sharp rise in interest rates in advanced economies during 2022 contributed to a slowdown in venture capital funding.
“These dynamics highlight the importance of developing domestic funding avenues, such as leveraging Nigeria’s capital markets, to reduce currency risk and sustain fintech growth,” the apex bank stated.
Olayemi Cardoso, CBN Governor, said Nigeria is undergoing a rapid and significant financial evolution. Over the past decade, the nation’s fintech landscape has grown from a handful of startups into one of Africa’s most vibrant innovation ecosystems.
“Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change. Today, with improved stability of our currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale,” the executive commented on the report.
In addition to funding, the central bank underscored Nigeria’s continued leadership in digital financial infrastructure. More than 25 per cent of all electronic transactions in Africa’s most populous nation are processed via real-time payment channels, with close to 11 billion transactions processed in 2024, up from five billion in 2022. The report described Nigeria’s instant payments platform, NIBSS NIP, as among the most mature and widely adopted globally.
The report also mentioned the need to strengthen system integrity and reputation, pointing to compliance reforms, anti-money laundering supervision, and consumer protection measures as key priorities for sustaining investor confidence.
By focusing on domestic funding, regulatory modernisation, and innovation infrastructure, the CBN aims to position Nigeria not only as a fintech front-runner but also as a rule-setter whose regulatory lessons are relevant to peer emerging and high-growth economies globally, the central bank said.
Stakeholders surveyed by the CBN also cited compliance costs as a significant challenge to innovation. According to the report, 87.5 per cent of respondents said that the cost of meeting regulatory and risk requirements significantly impacts their capacity to innovate, while delays in product approvals and regulatory timelines also remain major bottlenecks.
The report noted that 62.5 per cent of fintech firms plan to expand regionally, and there is strong support for regulatory pass-porting frameworks to enable compliant expansion into other African markets. However, the CBN warns that such cross-border growth requires a stable funding base and coordinated regulation.
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