• CBN mandates banks to expand ATM networks for improved customer access and faster refunds
• New ATM deployment ratio set at one machine per 7,500 cards to reduce congestion
• Instant refunds for failed transactions introduced to enhance customer satisfaction in Nigeria’s banking system

Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.

The Central Bank of Nigeria (CBN) has issued fresh directives to commercial banks, including Access Bank, UBA, Zenith Bank and others, requiring them to expand their automated teller machine (ATM) networks while ensuring faster refunds for failed transactions.

The new policy forms part of the apex bank’s revised guidelines on ATM operations designed to improve cash access, enhance service reliability and strengthen customer protection across Nigeria’s banking system.

The directive was contained in a circular signed by Musa Jimoh, director of the CBN’s payment system policy department, on March 13.

New ATM deployment ratio introduced

Under the revised framework, banks must now maintain at least one ATM for every 7,500 payment cards issued to customers.

The rule establishes a clear deployment benchmark aimed at reducing congestion at ATM points and ensuring wider availability of machines nationwide.

Previously, the ratio required banks to deploy one ATM for every 5,000 cards issued. With the revised threshold, the central bank is focusing more on structured and balanced deployment rather than simply increasing machine numbers.

To allow banks time to meet the requirement, the CBN has provided a three-year compliance timeline.

The regulator stated that compliance will be implemented in phases.

• 30% compliance by 2026
• 60% compliance by 2027
• 100% compliance by 2028

According to the apex bank, the phased approach will enable financial institutions to plan infrastructure investments while gradually expanding their ATM networks.

ATMs must be properly distributed

Beyond increasing the number of machines, the CBN also emphasized the need for proper distribution across the country.

Banks are expected to ensure ATMs are located within reasonable distances from one another in both urban and rural communities.

The policy is intended to address long-standing complaints about limited access to cash in underserved areas, where customers often travel long distances or face overcrowded ATM points.

In addition, the regulator stated that banks must obtain prior written approval from the CBN before deploying, relocating, or decommissioning ATM terminals.

Nigeria must process its own ATM transactions

The guidelines also reinforce the central bank’s push for domestic processing of payment transactions.

According to the CBN, all ATM transactions carried out in Nigeria must be processed by companies operating within the country.

This means banks and payment service providers will be required to use locally based processors for ATM transaction switching, authorization and clearing.

The regulator further warned card schemes against forcing Nigerian banks to route transactions through foreign processing systems.

“No card or payment scheme shall compel any issuer or acquirer to send any transaction outside the country for processing, authorization or switching,” the CBN stated.

The move is expected to strengthen Nigeria’s payment infrastructure while reducing reliance on foreign processing networks.

Instant reversal for failed ATM transactions

Another major highlight of the new rules is the introduction of stricter timelines for resolving failed ATM transactions.

Under the guidelines, refunds for failed “on-us” ATM transactions — where both the ATM and the card belong to the same bank — must now be processed instantly.

In situations where automatic reversal fails due to technical challenges, banks must complete manual reversals within 24 hours.

For interbank transactions involving different banks, refunds must be processed within 48 hours.

The CBN said the measure aims to reduce customer frustration caused by delayed reversals after unsuccessful withdrawals.

Biometric authentication allowed at ATMs

The framework also permits banks to deploy biometric authentication technologies at ATM terminals.

However, the central bank stressed that such systems must include strong safeguards to protect customer data, privacy and security.

According to the regulator, the goal is to support secure biometric verification while maintaining strict consumer protection standards.

The CBN warned that financial institutions that fail to comply with the new ATM operational guidelines risk facing regulatory sanctions.

CBN releases new Rule for activating dormant account

Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has introduced a new rule that removes the requirement for customers to present affidavits when reactivating dormant bank accounts.

The move is designed to simplify the process of reclaiming inactive funds while maintaining strong safeguards against fraud.

The decision was announced in a circular sent to banks and other financial institutions across the country.

Source: Legit.ng