CBN limits cash withdrawals to N100,000 weekly

Cash withdrawals through over-the-counter Automated Teller Machines (ATMs) have been limited by the Central Bank of Nigeria (CBN) to N100,000 for individuals and N500,000 for businesses every week.

The Director of the CBN’s Banking Supervision Department, Mr. Haruna Mustafa, signed a circular yesterday that the apex bank made available to all deposit money banks (DMBs) and other financial institutions (OFIs), announcing that the daily withdrawal limit from ATMs has been increased to N20,000, subject to a weekly cap of N100,000.

Additionally, the CBN instructed DMBs and OFIs to fill their ATMs with only notes worth N200 or less.

Clients of the organized banks and mobile money operators, however, found these stances unacceptable and have vowed to take action to voice their objection to the new regulations.

The CBN circular had stated: “Further to the launch of the redesigned naira notes by President Muhammadu Buhari on Wednesday, November 23, 2022, and in line with the cashless policy of CBN, all deposit money banks and other financial institutions are hereby directed to note and comply with the following: the maximum cash withdrawal over the counter by individuals and corporate organizations per week shall henceforth be N100,000 and N500,000 respectively.

“Withdrawals above these limits shall attract processing fees of 5.0 per cent and 10 per cent, respectively; third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10 million on clearing cheques still subsist; the maximum cash withdrawal per week via Automated Teller Machine shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.

“Only denominations of N200 and below shall be loaded into the ATMs; the maximum cash withdrawal via the point of sales terminals shall be N20,000 daily.

“In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits are required for legitimate purposes, such cash withdrawals shall not exceed N5 million and N10 million for individuals and corporate organizations, respectively, and shall be subject to the referenced processing fees in (1) above, in addition to enhanced due diligence and further information requirements.

“Further to (6) above, you are required to obtain the following information at the minimum and upload same on the CBN portal created for the purpose.”

In the meantime, the apex bank ordered banks and acquirers to stop using devices that discriminate between payment cards when conducting banking transactions in another circular issued yesterday and signed by Mr. Musa Jimoh, Director of the Payments Systems Management Department.

The regulator stated that these actions violated Nigeria’s Guidelines on the Operation of Electronic Payment Channels (June 2020).

Meanwhile, Valid Point View has collected information claiming that the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has criticized the CBN’s cash dispensing policy, citing that it will not work and that it will hurt business for mobile banking agents.

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Commenting on the new policy, President of AMMBAN, Mr. Olojo Victor said: “They want to send us out of business. We are against this. It is counter-productive. It does not represent what the CBN initially stood for in terms of financial inclusion. This is not driving us forward.

“It is a punishment for an average Nigerian. A bag of rice is N48,000. That means if I want to go to the market I can’t take cash. How will I do the transaction?

“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitized. There is no alternative and you are taking out cash. You are running a cash-dominant economy as we speak.

“Cash still remains king whether we like it or not. Go to the average market we still have more cash transactions than PoS and suddenly you want to seal cash without bringing alternatives and education and sensitizing Nigerians on how the alternatives work. This will not fly. It is not suitable. It is a good idea but not at the right time.”

In other news, Dr. Uju Ogubunka, President of the Bank Customers Association of Nigeria, or BCAN, praised the CBN for its approach. However, he pointed out that such a policy cannot be implemented in a nation where the majority of the populace are market women who are unable to use electronic payment methods.

Ogubunka added that the banking industry lacks the necessary infrastructure to support the CBN’s strategy, and that this will hurt business over the holiday season.

He also issued a warning about the potential growth in bank transaction failures and fraud through electronic payment channels.

Prince Saviour Iche, the president of the Association of Micro Entrepreneurs of Nigeria (AMEN), has also voiced his opposition to the new cash policy while pointing out that the CBN is attempting to force Nigerians to accept the cashless policy.

He, however, stated: ‘‘The problem we are having is that most of these policymakers do not consult the stakeholders in most of their policies. They don’t. The problem of this country is the wrong policies.”

What is your view and stand about this?