CBN asks banks to expand ATMs deployment, resolve failed transactions instantly

THE Central Bank of Nigeria (CBN) has directed banks to significantly expand their automated teller machine (ATM) networks, introducing a new deployment ratio that requires lenders to maintain at least one ATM for every 7,500 payment cards issued.

The directive is contained in the apex bank’s revised guidelines on ATM operations aimed at improving access to cash, strengthening service reliability, and enhancing customer protection.

The framework, which comes less than six months after the first, was signed by Director of the CBN’s Payment System Policy Department, Mr Musa Jimoh, on March 13.

Under the new rules, banks are now required to maintain at least one ATM for every 7,500 payment cards issued, against the 5,000 that was earlier instructed.

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This means an ATM must be made available for every 7,500 cards issued. The financial institutions were given 3 years to meet the deployment requirement. “The level shall be achieved over a period of three years, of which compliance levels are staggered as follows: 30 percent (2026), 60 percent (2027), and 100 percent (2028),” the CBN said.

The regulator said the policy is intended to ensure wider distribution of ATMs across the country and reduce the pressure on existing machines. “ATMs shall be located within a reasonable distance from each other in both urban and rural areas,” the bank said.

The CBN also said banks must receive prior written approval for the deployment, redeployment, and decommissioning of ATMs. The new guidelines also reinforce the central bank’s push for domestic processing of payment transactions.

“All ATM transactions in Nigeria shall be processed by a company operating in Nigeria as acquirer-processor,” the CBN said.

The regulator further directed that card schemes must not compel Nigerian banks to route ATM transactions outside the country. “No card or payment scheme shall compel any issuer or acquirer to send any transaction outside the country for processing, authorization or switching,” the bank said.

Guidelines for failed transactions

The framework also introduces stricter timelines for resolving failed ATM transactions. According to the new rules, reversals for failed on-us transactions, where the ATM and card issuer belong to the same bank, must be processed instantly.

“Failed on-us ATM transactions reversal shall be instant,” the CBN said. However, where automatic reversals fail due to technical issues, the regulator said manual reversals must not exceed 24 hours.

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“For interbank transactions, refunds must be completed within 48 hours,” the regulator said. The guidelines also made provisions for the deployment of biometric authentication at ATMs, provided operators implement safeguards to protect customer data.

According to the CBN, the rules are intended to enable secure biometric authentication at ATMs under clear privacy, security and consumer protection safeguards. The apex bank warned that institutions that fail to comply with the provisions of the guidelines may face regulatory penalties.