As Nigerians grapple with unprecedented economic hardship, the cancellation of free ATM withdrawals represents a new and unfair financial blow. The unbearable cost of living marked by sky-high inflation, relentless electricity, telecom tariff hikes, and crushing fuel prices have pushed many citizens to their financial limits. The Governor of the Central Bank of Nigeria, Olayemi Cardoso, should reverse the cancellation.
Rather than offering relief, the CBN has imposed new charges on basic transactions, further bleeding customers. This policy is regressive taxation, targeting the most vulnerable members of society.
The CBN’s obsession with levying nuisance taxes on bank customers is worrisome. In May, the CBN was forced to reverse its directive to banks to impose a Cybersecurity Levy of 0.5 per cent on electronic banking transactions after public outcry.
It has revived its underhand tactics by cancelling the three free withdrawals per month allowed to bank customers on other ATMs.
Under the new directive, withdrawals from a customer’s bank ATM remain free. However, customers using another bank’s ATM will be charged N100 per N20,000 withdrawal when using ATMs located within bank premises. For withdrawals made at off-site ATMs, N100 per N20,000 withdrawal will apply, along with a surcharge of up to N500.
The CBN stated that the policy is expected to “accelerate the deployment of ATMs and ensure that appropriate charges are applied by financial institutions to consumers of the service”, citing rising costs. This is punitive; the argument is weak.
Inflation has driven up the cost of essential goods and services by double digits. Electricity tariff (Band A) was raised by 307 per cent from N68/kWh to N225/kWh in April.
The telecom services tariff has just been raised by 50 per cent. Basic transportation is out of reach for many after petrol prices shot up by 500 per cent.
Food is barely affordable for most, with nearly 11.7 per cent of the world’s population in extreme poverty found living in Nigeria, per Statista.
Amidst this, it is galling that banks already making record-breaking profits would target Nigerians with additional charges for withdrawing their money.
It appears that the CBN is prioritising corporate greed over citizens’ welfare. It seems lost on the CBN that its policy to float the naira and incessant interest rate hikes with no discernible effect on inflation is largely responsible for the pervasive misery in Nigeria.
The banking sector in Nigeria is far from struggling. In the first nine months of 2024, 10 major banks posted a combined pre-tax profit of N4.2 trillion, equal to 15.27 per cent of the 2024 budget and double the N2.07 trillion posted a year earlier.
These humongous figures are derived from high-interest loans and multiple layers of charges on customers. Rather than ensure adequate oversight to protect customers from exploitative practices, the CBN is finding additional ways for banks to make easy money. The CBN’s decision to further squeeze everyday Nigerians with ATM withdrawal fees is insensitive, cruel, and provocative.
Why should customers pay N600 or 3.0 per cent to withdraw N20,000 when banks have pegged daily withdrawal limits at N20,000 and N5,000 for customers and non-customers, respectively?
Many small businesses, including transporters, rely on cash transactions. PoS operators are bound to have a field day with exorbitant charges.
Most ATMs are free in Britain, except the ones deployed by independents. Banks pay a small interchange fee for their customers on other bank ATMs.
The CBN, which is supposed to protect customers, has allowed banks to levy all sorts of fees, including account and card maintenance, in addition to the statutory EMTL. Many Nigerians have migrated to fintech firms to escape extortionate charges and shoddy services.
Wealthier Nigerians, who have access to more advanced financial services and digital payment options, will largely avoid these new fees.
Therefore, the National Assembly, the Federal Competition and Consumer Protection Commission and the Nigerian Labour Congress must intervene to stop this travesty.
