Central Bank of Nigeria defends reintroduction of fees on ATM withdrawals

The Central Bank of Nigeria (CBN) has defended its decision to reintroduce a fee on ATM withdrawals, describing it as a "critical" measure taken to prevent the abuse of ATMs and ensure the interoperability of the country's payment systems.

The CBN announced the introduction of a 65 naira ($0.40) fee on withdrawals from ATMs that are not operated by the customer's own bank – a so-called "remote-on-us" transaction – in a circular last Thursday.

The move prompted strong reactions from Nigerians that, according to a statement yesterday by the CBN, showed "a clear lack of understanding" of the rationale behind the bank's decision.

"Charging of fees on interbank networks is a widely acceptable practice globally," the CBN said, adding the move was "not intended to discourage financial inclusion", but rather to spur competition among banks and promote the central bank's cash-less policy.

"Transaction volumes at other banks' ATMs have increased astronomically due to [free withdrawals]," the CBN said. "Indeed, some customers were beginning to abuse the use of ATMs through countless daily withdrawals".

"This development," the bank added, "has led to [an] increase in cash transactions, which negate the [CBN's] cash-less policy.

It also noted that ATMs are expensive to maintain and that the fee would help providers to do so. "The wear and tear as well as the frequency of servicing the ATMs has increased significantly," the bank said.

The CBN abolished a similar fee of 100 naira in 2012, opting to charge banks instead in a bid to "promote the use of ATMs nationwide".

In yesterday's statement, the CBN said that effort had "sufficiently raised customer awareness".