The Socio-Economic Rights and Accountability Project (SERAP) has taken legal action against the Central Bank of Nigeria (CBN), challenging what it describes as an “unlawful, unjust, and unreasonable” increase in Automated Teller Machine (ATM) transaction fees. The lawsuit, filed at the Federal High Court in Lagos, seeks to halt the implementation of the newly introduced ATM charges, which SERAP argues unfairly burden Nigerian consumers.
Background of the Controversial Fee Increase
Recently, the CBN issued a circular announcing that ATM withdrawals made at machines owned by banks but located outside their branch premises will now incur a charge of N100 per N20,000 withdrawn. Furthermore, withdrawals at standalone ATMs, such as those found in shopping malls, airports, and other public spaces, will attract a base charge of N100 plus a surcharge of up to N500 per N20,000 withdrawn. This decision has sparked outrage among consumers and civil society organizations, who see it as another attempt to exploit bank customers amid rising economic hardships.
SERAP’s Legal Argument Against the CBN
SERAP, through its legal representatives Kolawole Oluwadare and Andrew Nwankwo, argues that the fee increase is not only exploitative but also violates multiple provisions of the Federal Competition and Consumer Protection Act (FCCPA) 2018. The advocacy group contends that the hike contradicts sections 1(c) and (d), 104, 105, and 127(1) of the Act, which explicitly prohibit arbitrary and unfair business practices.
The organization asserts that the CBN’s decision creates an unfair financial system that disproportionately affects lower-income Nigerians, many of whom rely on ATMs as their primary means of accessing cash. According to SERAP, the fee increase exacerbates economic inequality and infringes on the financial rights of Nigerians by placing undue financial stress on those least capable of absorbing these additional costs.
Key Demands from SERAP’s Lawsuit
In its suit, SERAP is requesting the court to:
- Declare the ATM fee increase as arbitrary, unfair, and unlawful, citing its violation of consumer protection laws.
- Invalidate the CBN’s circular issued on February 10, 2025, which formally introduced the new charges.
- Issue an interim injunction preventing the CBN, its agents, and all financial institutions from implementing or enforcing the new ATM fee structure.
- Compel the CBN to obtain the consent of the Federal Competition and Consumer Protection Commission (FCCPC) before making unilateral adjustments to financial service charges.
Concerns Over CBN’s Policy Direction
SERAP highlights that the new charges contradict the CBN’s stated mission of promoting economic stability and financial inclusion. The group further criticizes the apex bank for implementing policies that prioritize the profit margins of financial institutions over the welfare of ordinary Nigerians.
“The CBN is compromising its responsibility to manage Nigeria’s economy in a way that promotes sustainable development. Policies such as these only widen the gap between the wealthy banking sector and the struggling masses,” the suit reads in part.
The lawsuit also calls attention to the massive profits declared by Nigerian banks in recent years. According to SERAP, “At a time when banks are reporting trillions of naira in annual profits, it is unacceptable to impose excessive fees on customers who are already struggling with economic hardship.”
Legal Basis for the Challenge
SERAP’s case heavily relies on several provisions of the FCCPA 2018, which regulate commercial transactions in Nigeria. The Act explicitly prohibits businesses—including government agencies like the CBN—from engaging in practices that are exploitative or detrimental to consumers.
Section 127(1) of the Act specifically prohibits institutions from imposing fees that are “manifestly unfair, unreasonable, or unjust.” Moreover, Section 104 establishes the supremacy of the FCCPA over other laws, including the CBN Act, ensuring that financial policies do not violate consumer rights.
Furthermore, Section 70(1) of the Act defines a “dominant position” as a situation where an institution, like the CBN, can act without considering the reactions of consumers. By enforcing the ATM fee hike without public consultation, SERAP argues that the CBN has abused its dominant position.
Implications for Nigerian Consumers
If allowed to stand, the increased ATM fees will place additional financial strain on millions of Nigerians who rely on cash transactions. Critics argue that the policy benefits banks at the expense of the general public and could push more people away from formal banking services, contradicting the CBN’s financial inclusion goals.
Consumer advocacy groups have also warned that such fee hikes could lead to a dangerous precedent where financial institutions regularly impose arbitrary charges without accountability.
Next Steps in the Legal Battle
While the Federal High Court is yet to set a date for the hearing of SERAP’s suit, the case is expected to draw significant public interest. If the court rules in favor of SERAP, the CBN may be forced to retract the fee hike, setting a crucial legal precedent for consumer rights in Nigeria.
For now, millions of Nigerians wait anxiously to see whether the judiciary will side with the people or uphold the controversial CBN policy.
