CBN introduces new ATM refund guideline, compelling banks to return customers’ funds within 48 hours for failed transactions

CBN ATM refund guideline has been released in a new draft circular by the Central Bank of Nigeria, introducing strict timelines for banks to refund customers after failed ATM transactions.

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Under the proposed rule, banks must refund customers for failed interbank (not-on-us) transactions within 48 hours, while failed transactions on the same bank’s machine must be reversed instantly.

Where instant reversal is not possible due to technical hitches, a manual reversal must be completed within 24 hours.

The policy, titled Exposure of the Draft Guidelines on the Operations of Automated Teller Machines (ATMs) in Nigeria, was signed by Musa Jimoh, Director of the Payments System Policy Department.

The apex bank said the move is part of broader reforms to enhance reliability, safety, and consumer trust in the nation’s payment ecosystem.

According to the CBN, the document sets out to improve operational standards, boost consumer protection, and align Nigeria’s ATM system with global best practices.

It applies to Deposit Money Banks, Independent ATM Deployers, Payment Service Providers, and Card Schemes.

The draft also mandates ATM deployers to guarantee user safety and transaction confidentiality. Machines must be fitted with surveillance cameras to monitor activities—such as card insertion and cash withdrawal—without recording keystrokes for privacy.

ATMs located outdoors must be securely bolted and protected from unauthorised access or theft.

Transparency is another cornerstone of the CBN ATM refund guideline.

All charges must be displayed before transactions are completed, and every transaction must generate a receipt or confirmation screen showing key details like amount, terminal ID, and time. A clearly visible helpdesk contact must be displayed for customer complaints.

The new rules also stipulate that ATM downtime must not exceed 72 consecutive hours. Machines inactive beyond that period must be reported, with customers promptly notified of reasons for service disruptions.

Operators must ensure continuous cash availability, avoid loading unfit notes, and maintain online monitoring systems for prompt fault detection.

Perhaps the most powerful provision in the circular is the requirement for automatic refunds. The CBN insists that ATM acquirers must have systems capable of initiating refunds for failed or partial cash dispenses without waiting for customer complaints.

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

Further measures include yearly encryption key changes, installation of anti-skimming devices, and disabling of the cash-retract function to prevent customers from forgetting cash or cards.

ATMs must also allow free PIN changes and provide backup power to ensure uninterrupted service.

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The CBN ATM refund guideline aims to address persistent complaints over failed transactions and poor service quality, ultimately ensuring accountability, reliability, and stronger consumer confidence in Nigeria’s banking system.