Withdrawal limits: PoS operators, Falana set for court, Gbajabiamila faults Emefiele

Operators of Point of Sale terminals and Lagos-based human rights attorney Femi Falana have threatened legal action against the Central Bank of Nigeria if the policy limiting over-the-counter cash withdrawals by individuals and businesses to N100,000 and N500,000, respectively, per week remains in place.

As previously reported by Valid View Network, the CBN had stated in the letter establishing the policy that third-party cheques over N50,000 would no longer be eligible for OTC payment, although the current clearing cheque limits of N10m would still apply.

The circular further instructed banks to limit ATM withdrawals to N20,000 per day and to only load N200 and smaller denominations into their machines. Additionally, PoS terminal withdrawals were restricted to N20,000 per day.

The CBN emphasized last Wednesday that PoS operators might request exceptions from the rule, which will go into effect on January 9, 2023.

Falana, however, referred to the CBN’s new cash withdrawal limit regulation as unlawful on Monday. He declared that he would proceed with suing the apex bank if its administration did not reverse the new policy.

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Falana in a statement titled, ‘Maximum withdrawal limit in Nigeria is N5m’ called on the President, Major General Muhammadu Buhari,(retd), to direct the apex bank to withdraw the ‘illegal guideline’.

According to him, “It is embarrassing that the Central Bank of Nigeria has been making announcements without any regard to the Constitution and other relevant laws on the national economy. It is particularly worrisome that the Governor of the Central Bank of Nigeria has purportedly placed a limitation on cash withdrawals in Nigeria in complete defiance of section 2 of the Money Laundering Act, 2022 which provides as follows:

“No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding (a)5,000,000 or its equivalent, in the case of an individual; or (b) N10,000,000 or its equivalent, in the case of a body corporate.

 “A person shall not conduct two or more transactions separately with one or more financial institutions or designated non-financial businesses and professions with intent to (a) avoid the duty to report a transaction which should be reported under this Act ; and (b) breach the duty to disclose information under this act by any other means.

 “Since the Money Laundering Act 2022 (which has fixed maximum cash withdrawal to N5 million) has not been amended, the limitation of cash withdrawal of not more than N20,000 per day and N100,000 per week fixed by the Central Bank of Nigeria is illegal, null and void in every material. We urge the Nigerian people to ignore the illegal announcement.

“However, we are compelled to call on President Muhammadu Buhari to direct the management of the CBN to withdraw the illegal guideline and stop announcing more policies that are designed to sentence poor citizens to more excruciating economic hardship”.

However, the legal erudite noticed the effect of the policy on market men and women while chatting exclusively with a small number of correspondents in Abuja.

We haven’t reached that point yet, Falana responded when asked if he planned to challenge the CBN or the Federal Government over the program. I’d like a response from them first. Inform them that I said it was unconstitutional. I can tell you that we will sue if they don’t rescind the order.

Femi Gbajabiamila, the Speaker of the House of Representatives, has also joined the criticism of the contentious policy that the Central Bank of Nigeria recently enacted, which among other things places restrictions on cash withdrawals from deposit money banks and other financial institutions.

Last Thursday, the House urged the CBN to delay implementing the policy until the legislators’ investigations were finished.

As a result, the House had invited Godwin Emefiele, the governor of the Central Bank of Nigeria, to come and present the policy before the legislature. On Thursday, he will appear before the lawmakers.

In his talk at the second installment of the Distinguished Parliamentarians Lecture Series, which was held on Monday in Abuja and sponsored by the National Institute for Legislative and Democratic Studies, Gbajabiamila shared his opinions.

Gbajabiamila said, “Recently, the Central Bank of Nigeria announced a policy to redesign the Nigerian Naira and impose restrictions on cash transactions across the economy. The National Assembly has been inundated with petitions from citizens worried about the impact of the new policies on their businesses and concerned that the policy approach will not deliver its stated policy objectives. Many have pointed to the fact that in India where a similar policy was implemented beginning in 2016, the expected benefits haven’t materialized, yet there has been a pronounced contraction in the economy probably linked to the policy.

“Now, whatever the concerns about the policy may be, it should not be the normal course of things for such a profoundly impactful policy programme to be designed, approved and announced without any engagement with the legislature, or any attempt to seek the perspectives of the people’s representatives. Keep in mind, these are the very same people who will have to explain and answer for these policies in communities across the country.

In a related development, PoS operators, under the aegis of the Association of Mobile Money and Bank Agents of Nigeria, has said the association will engage the services of Falana’s chambers in the proposed legal suit against the CBN if the regulator fails to reverse the directive.

Speaking in an exclusive interview with one of our correspondents, the National President of the association, Victor Olojo, said the PoS agents, through the association’s lawyer, Douglas Okojie, had concluded plans to initiate a legal suit on the development.

He said, “The first option is to write to Falana to represent AMMBAN in the legal action about to be initiated. While the second option is to get another lawyer to apply to the court, maybe after the suit has been filed, and make AMMBAN an interested party in the suit.”

Olojo further appealed to the CBN to give listening ears to the pleas of mobile money and bank agents, alongside Nigerians in general.

Meanwhile, bank customers and MSMEs have said they are still awaiting the CBN to review the policy, which they had criticised last week.

The President, Bank Customers Association of Nigeria, Dr Uju Ogubunka, in an interview with our correspondent, however, said the body was not planning to sue the CBN on the policy.

He said, “We, at this point in time, have not considered and do not intend to go to court to challenge the policy issued by CBN. As it were, there is an understanding that the policy may be reviewed soon; that is, after what we consider this test-run. We await follow-up actions by the policy initiators.”

Also, the Chairman of the Nigerian Association of Small and Medium Enterprises, Prof Adebayo Adams, also said the association had no plans to go to court over the development.

He said, “We cannot go to court as we are also regulated by the government on one hand. The CBN is an institutional member of NASME, so we cannot do that. We are limited on that issue as we have engaged CBN at our top-level management.”