Emefiele bows to pressure as he increases withdrawals to N500,000 and N5 million

Godwin Emefiele, the governor of the Central Bank of Nigeria, has finally surrendered to pressure to change the bank’s rules regarding cash withdrawal limits.

The CBN stated in a circular issued on Wednesday by Haruna Mustafa, director of banking supervision, that it had increased the maximum weekly limits for cash withdrawals by individuals and corporate organizations through all channels to N500,000 and N5m, respectively.

The CBN credited the advancement to the feedback it received from stakeholders. Financial institutions must collect client information for transactions that exceed withdrawal limits and upload it to the CBN portal set up for that purpose.

These details include a legitimate form of identification for the payee (national identity card, international passport, or driver’s license), Bank Verification Number of the payee, Tax Identification Number of both the payee and the payer, and approval in writing by the managing director/Chief Executive Officer of the financial institution authorising the withdrawal.

Additionally, it was stated that the current clearing cheque maximum of N10 million would continue to apply, and third-party cheques exceeding N100,000 would not be acceptable for payment over the counter.

The CBN recommended banks to encourage clients to undertake their banking transactions using different channels (Internet banking, mobile banking apps, USSD, cards/Pos, eNaira, etc.).

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The CBN added that it would guarantee an inclusive approach as it implemented the shift to a more cashless society and acknowledged the critical role that cash plays in aiding underserved and rural populations.

Following this choice, a number of the concerned stakeholders have praised the CBN’s decision and action to examine the policy and take the appropriate steps. Victor Olojo, president of the Association of Mobile Money and Bank Agents in Nigeria, praised the CBN’s move to reconsider the policy. But he bemoaned the fact that it took a widespread uproar to draw the management of the top bank’s attention.

Dr. Uju Ogunbunka, President of the Bank Customers Association of Nigeria, argued that the fresh review is an indication that the CBN is sympathetic to the hardship of the general populace and that uncovering more information about the policy might be discussed later.

Dr. Adebayo Adams, the Lagos State Chairman of the Nigerian Association of Small and Medium-scale Enterprises, added that the new initiative will make it easier for people and companies who aren’t fully integrated into the cashless policy system to conduct business.

Gabriel Idahosa, the deputy president of the Lagos Chamber of Commerce and Industry, responded by saying that while the CBN had the right idea, it was not implemented in a way that included all Nigerians who would be affected.

He claimed that the apex bank should have established particular exclusions for the group of persons who require large amounts of cash for their regular commercial operations.

The CBN had previously issued a circular on December 6 stating that as of January 9, 2023, the weekly maximum over-the-counter cash withdrawal limit for both individuals and corporate organizations would be N100,000 and N500,000, respectively, and that withdrawals in excess of these limits would be subject to processing fees of 5% and 10%, respectively.

Additionally, it claimed that starting on January 9, the maximum cash withdrawal limit each week using automated teller machines will be N100,000, subject to a daily withdrawal limit of N20,000.

Additionally, the apex bank instructed banks to fill their ATMs with only notes worth N200 or less.

Following the previous directive, many stakeholders kicked against it. With this development, many stakeholders seem to get a balance with it.