CBN Issues Strict Order: Banks Must Refund Failed ATM Transactions Within 48 Hours

The Central Bank of Nigeria (CBN) has issued a new directive mandating Deposit Money Banks and other financial institutions to refund customers within 48 hours for failed Automated Teller Machine (ATM) transactions — a bold step aimed at restoring public confidence in the nation’s banking system.....KINDLY READ THE FULL STORY HERE▶

The directive was contained in a draft guideline released on Saturday, titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria”, and signed by the Director of the Payments System Policy Department, Musa I. Jimoh.

According to the document, which has been circulated to banks, payment service providers, card schemes, and independent ATM operators, stakeholders are expected to submit feedback by October 31, 2025.

Under the new draft, failed “on-us” transactions — where a customer uses their own bank’s ATM — must be reversed instantly. In cases where technical issues prevent immediate reversal, refunds must be completed manually within 24 hours.

For “not-on-us” transactions, where a customer uses another bank’s ATM, refunds must be processed within 48 hours.

“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular emphasised.

The CBN further directed banks and ATM acquirers to adopt technology capable of automatically reversing failed or partial transactions, thereby eliminating the need for customers to file complaints.

To improve accessibility, the apex bank ordered banks and card issuers to deploy at least one ATM for every 5,000 active cards, with compliance targets set at 30% by 2026, 60% by 2027, and full compliance by 2028.

In addition, any new ATM deployment, relocation, or removal must first be approved by the CBN.

The new framework also introduces enhanced safety and usability standards — mandating anti-skimming devices, CCTV installation, enclosed or well-lit ATM areas, and compliance with Payment Card Industry Data Security Standards (PCI DSS).

Each ATM must maintain audit logs, display valid helpdesk contacts, and ensure that at least 2% of ATMs nationwide cater to visually impaired users through tactile features.

Other key requirements include:

• ATMs must dispense cash before returning cards;

• PIN change should be free of charge;

• Transaction fees must be clearly displayed;

• Receipts must be issued for all transactions except balance inquiries;

• Only clean banknotes should be dispensed;

• Backup power systems must be installed to reduce downtime.

Operators must also ensure ATMs are not out of service for more than 72 consecutive hours. When outages occur, operators are required to notify the public with reasons and estimated restoration time.

Enforcement and Sanctions

The CBN warned that compliance would be strictly monitored through routine audits, field inspections, and monthly deployment reports.

While specific penalties were not detailed, non-compliant institutions will face appropriate sanctions.

The apex bank explained that the reforms are driven by the need to address recurring issues of failed transactions, cyber fraud, and deteriorating service delivery within Nigeria’s growing electronic payments system.

“The goal is to build a payments system that works seamlessly for everyone — both urban and rural users,” the CBN noted.

With over 200 million cardholders nationwide, Nigeria’s digital payment sector has grown rapidly, yet persistent network failures, outdated infrastructure, and slow refunds have eroded public trust.

This new guideline comes eight months after the CBN last reviewed ATM charges, signaling a renewed push for accountability and efficiency in the country’s financial ecosystem.