CBN Imposes Limit on Weekly Cash Withdrawal in New Policy

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Highlights

  • Central Bank of Nigeria sets limits for over-the-counter cash withdrawals in its new policy.
  • The maximum weekly money withdrawals are N100,000 and N500,000 for individuals and cooperate entities, respectively, while POS is N20,000.
  • The bank says that withdrawal above the limit will require a long procedure with up to 5% to 10% charges.
  • The Cash withdrawal limit is one of the CBN's latest policies after it redesigned the Naira notes.
CBN Imposes Weekly Cash Withdrawal Limit in Its New Policy

Central Bank of Nigeria Introduces Limits on Weekly Cash Withdrawal in New Policy

The Central Bank of Nigeria (CBN) on Tuesday announced a new policy that limits the withdrawal of cash from Nigerian banks. In its press release, the apex bank directed financial institutions and deposit money banks to only allow customers to withdraw a fixed amount of money over a given period as detailed in a note distributed by the bank.

In a letter signed by the CBN Director of Banking Supervision, Haruna Mustapha, individuals are only allowed to withdraw N100,000 weekly, while cooperating entities can only withdraw over-the-counter cash of N500,000 weekly.

In addition, the maximum point of sale (POS) withdrawal allowed for both cooperates entities and individuals is N20,000. This new policy is to be implemented immediately with effect from January 9, 2023, according to the CBN.

The bank disclosed that any transaction above the stated limit will attract a high percentage of charges.

"The maximum cash withdrawal over the counter (OTC) by individuals and cooperate organizations per week shall henceforth be N100,000 and N500,000 respectively.

Withdrawal above these limits shall attract processing fees of 5% and 10%, respectively." Meanwhile, cash withdrawal above the stated limit is only permitted for legitimate purposes and shall not exceed N5 million for individuals and N10 million for cooperating organizations, respectively.

The CBN also prohibits OTC payment of third-party checks that is more than N50,000 and places ATM withdrawal at N20,000 per day which sums to N100,000 per week.

"Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing checks still subsist," the bank declared in its circular. Meanwhile, only N200, N100, and N50, denominations, and below are to be loaded into the ATM.

The bank added that for individuals to withdraw above the listed amount of money, he/she has to submit personal data including means of identification, Bank verification number (BVN), declaration of purpose, Managing director approval (for cooperate bodies), and written approval by the bank Managing director or CEO.

Central Bank of Nigeria Introduces Limits on Weekly Cash Withdrawal in New PolicyCBN Letter to Banks and Financial Institutions on Cash withdrawal limit

CBN Letter to Banks and Financial Institutions on Cash withdrawal limit

CBN Controversial Policy Changes in Recent Months

This new CBN order comes a month after the central bank declared it was going to redesign the Naira note. The new Naira note was unveiled a few weeks ago and it is expected to become Nigeria's legal tender by the end of December. This will render the current note in circulation invalid.

The Central Bank of Nigeria had made new changes in recent times. Setting a cash withdrawal limit is the latest of its policies.

The primary intent of placing the withdrawal limit remains unclear but many believe it is promoting a cashless economy which has been one of the bank's targets for years. Meanwhile, other analysts believe the recent implementation of controversial policies by the Central Bank is to minimize vote buying in upcoming Nigeria's 2023 general election.

The CBN while announcing the redesign of the Naira in November declared that it was part of its responsibilities to have control over Nigeria's currency, the Naira.

The bank disclosed that a large number of the country's notes were out of the bank due to fraud and money laundering. Its policies aimed at ensuring that all the money in circulation within the country was under the jurisdiction of the apex bank.

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