SERAP sues CBN over failure to reverse ATM fees

The Socio-Economic Rights and Accountability Project, SERAP, has filed a lawsuit against the Central Bank of Nigeria, CBN, over what it termed the ”failure to reverse the patently unlawful, unfair, unreasonable and unjust increase in Automated Teller Machine (ATM) transaction fees”.

The CBN recently announced that ATM withdrawals made at a machine owned by a bank but outside its branch premises will now attract a charge of N100 per N20,000 withdrawn. ATM withdrawals at shopping centres, airports or standalone cash points, will incur a N100 fee plus a surcharge of up to N500 per N20,000 withdrawal.

In the suit number FHC/L/CS/344/2025 filed last Friday at the Federal High Court, Lagos, SERAP is asking the court to determine whether the decision by the CBN to increase ATM transaction fees is not arbitrary, unfair, unreasonable, and contrary to the provisions of the Federal Competition and Consumer Protection Act 2018.

SERAP is asking the court for a declaration that the decision by the CBN to increase ATM transaction fees is arbitrary, unfair, unreasonable and contrary to the provisions of sections 1(c) and (d), 104, 105 and 127(1) of the Federal Competition and Consumer Protection Act 2018, which is binding on the CBN.

SERAP is also seeking an order of interim injunction restraining the CBN, its officers, agents, associates or any other persons acting on its directive or instructions from enforcing and giving effect to the decision, pending the hearing and determination of the motion on notice for an order of interlocutory injunction filed in this suit.

In the suit, SERAP is arguing that the increase cannot be justified under the Nigerian Constitution 1999 [as amended], the CBN Act, Federal Competition and Consumer Protection Act, and the country’s international human rights obligations.

SERAP is also arguing that the increase creates a two-tiered financial system that discriminates against poor Nigerians who may not be able to afford or pay the increased ATM fees.

According to SERAP, “The patently unlawful, unfair, unreasonable and unjust increase in ATM transaction fees also inherently contributes to violations of the human rights of socially and economically Nigerians.”

Kolawole Oluwadare and Andrew Nwankwo, who filed the suit on behalf of SERAP stated that the CBN is compromising its stated mission to advance the management of the country’s economy, and ultimately, sustainable development.

It said that the CBN is also failing to comply with the Nigerian Constitution, the Federal Competition and Consumer Protection Act and the country’s international human rights obligations in the exercise of its statutory powers and functions.

According to SERAP, the increase in ATM transaction fees ought to have been shouldered by wealthy banks and their shareholders, not the general public.

It noted that CBN policies should not be skewed against poor Nigerians and heavily in favour of banks that continue to declare trillions of Naira in profits mostly at the expense of their customers, saying that the increase in ATM transaction fees would inflict misery on poor Nigerians and contribute to human rights abuses.

It observed that imposing exorbitant ATM transaction fees on socially and economically vulnerable Nigerians at a time several Nigerian banks are declaring trillions of naira in profits yearly is manifestly unfair, unreasonable and unjust.

SERAP said the CBN through a Circular to all banks and other financial institutions dated February 10 2025 stated that it has reviewed and increased the ATM transaction fees prescribed in section 10(7) of the CBN Guide to Charges by Bank, Other Financial and Non-Bank Financial Institutions 2020.

It explained that section 1(c)(d) of the Federal Competition and Consumer Protection Act, 2018 provides that the objectives of the Act are to ‘protect and promote the interests and welfare of consumers’ and ‘prohibit restrictive or unfair business practices’ such as the exorbitant and unreasonable increase in ATM transaction fees by the CBN.

The provisions of the Federal Competition and Consumer Protection Act, SERAP said are directly binding on the CBN, as the provisions constrain the exercise of the statutory powers and functions of the institution.

It added that section 2(1) of the Act provides that its provisions ‘apply to all undertakings [such as the CBN] and scope of application to all commercial activities within Nigeria, stressing that section 2(2) provides that the Act is binding upon- (a) a body corporate or agency of the Government; (b) a body corporate; (c) all commercial activities aimed at making profit and geared towards the satisfaction of demand from the public.

According to section 70(1) of the Act, for the purpose of this Act, an undertaking [such as the CBN] is considered to be in a dominant position if it is able to act without taking account of the reaction of its customers or consumers.

SERAP stated that the Act prohibits abuse of dominant position by the CBN including charging excessive ATM transaction fees to the detriment of consumers.

It said that section 104 of the of the Act asserts the supremacy of the Act over ‘the provisions of any other law’, such as the CBN Act and the only exception to the provision is the Nigerian Constitution 1999 [as amended].

It observed that Section 127(1) of the Act also prohibits the CBN from making any policy or providing any services at a price that is manifestly unfair, unreasonable or unjust.

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