CBN Orders Banks To Refund Failed ATM Transactions Within 48 Hours

The Central Bank of Nigeria (CBN) has directed Deposit Money Banks and other financial institutions to refund customers within 48 hours for failed Automated Teller Machine (ATM) transactions, in a sweeping reform aimed at restoring public confidence in the banking system.

The directive is 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.

Naija News reports that the document was circulated to banks, payment service providers, card schemes, and independent ATM deployers, with a call for stakeholder feedback by October 31, 2025.

Under the draft guidelines, failed “on-us” transactions, when a customer uses their own bank’s ATM, must be reversed instantly. Where technical hitches prevent immediate reversal, refunds must be processed manually within 24 hours.

For “not-on-us” transactions, when a customer uses another bank’s ATM, the draft stipulates a maximum refund period of 48 hours.

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

The CBN also mandated banks and ATM acquirers to deploy technology that automatically reverses failed or partial transactions, eliminating the need for customers to lodge complaints.

In a bid to modernise ATM operations, the CBN directed banks and card issuers to deploy at least one ATM for every 5,000 active cards. The rollout will be phased: 30% compliance in 2026, 60% in 2027, and full compliance by 2028.

Any future deployment, relocation, or decommissioning of ATMs must receive prior approval from the CBN, the draft noted.

The new framework also sets safety and accessibility standards. All ATMs must be installed with anti-skimming devices, CCTV cameras, and placed in enclosed or well-lit areas.

Machines must comply with Payment Card Industry Data Security Standards, keep detailed audit logs, and display functional helpdesk contacts. At least 2% of all ATMs nationwide must feature tactile symbols for visually impaired users.

Other requirements include dispensing cash before returning cards, free PIN change options, clear display of transaction fees, issuing receipts (except for balance inquiries), dispensing only clean banknotes, and providing backup power to minimise downtime.

Operators must ensure ATMs are not out of service for more than 72 consecutive hours. When this occurs, they must inform the public of the cause and the expected restoration time.

Sanctions and Enforcement

The apex bank warned that compliance would be enforced through regular audits, on-site inspections, and monthly reports from ATM operators detailing deployments and locations.

Though specific fines were not disclosed, defaulting institutions risk sanctions for failure to meet the standards.

The CBN explained that the reforms were necessary to tackle growing complaints over failed transactions, cyber fraud, and poor service delivery in Nigeria’s electronic payments space.

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

Nigeria’s electronic payments sector has grown rapidly, with over 200 million cardholders now relying heavily on digital banking. Yet, network failures, declining infrastructure, and delayed transaction reversals have consistently eroded consumer trust.

Naija News reports that the fresh guidelines come just eight months after the apex bank revised ATM fees.

Source: Naijanews