CBN limits cash withdrawal to N100,000 weekly

The Central Bank of Nigeria (CBN) yesterday revealed a radical new currency management strategy that caps the amount of cash that people and corporations can withdraw.


The apex bank announced that starting of January 9 both people and businesses will be limited to weekly cash withdrawals of N100,000 for individuals and N500,000 for businesses.


Other payment methods, such as automated teller machines (ATM), points of sale (POS), and cheque-based transactions, are also impacted by the revised cash withdrawal limitations.


It generally applies to all commercial banks, including payment service banks (PSBs), principal mortgage banks (PMBs), and microfinance institutions (MFBs).


According to the policy, people and businesses who take money straight from the banking hall will pay 5% and 10% on withdrawals that exceed the permitted limit.


The bank also put a weekly cap of N100,000 on the amount of cash that can be withdrawn from an ATM, with a daily cap of N20,000.


The maximum cash withdrawal through a PoS terminal shall be N20,000 per day in a similar vein.


The apex bank states that in urgent situations, not more than once per month, where cash withdrawals above the permitted limits are necessary for lawful purposes, such cash withdrawals shall not exceed N5 million and N10 million for individuals and corporate organizations, respectively, and shall be subject to the aforementioned processing fees as well as additional enhanced due diligence and information requirements.


Haruna Mustafa, Director of the CBN's Banking Supervision Department, announced the policy in a letter to deposit money banks and other financial institutions.


Customers should be encouraged to undertake their financial transactions through alternate channels, according to the CBN, which include eNaira, mobile banking apps, Unstructured Supplementary Service Data (USSD), cards, and Point of Sale (POS) terminals.


Richard Obire, a former executive director of Keystone Bank Limited, claimed that the program will promote a cashless society.


He said that using higher denomination notes less would assist to combat growing inflation and that these higher denominations would now function as stores of value.