CBN Begins the Execution of Cash Withdrawal Limit Today to Promote a Cashless Economy

Central Bank of Nigeria Commences Implementation of Cash Withdrawal Policy for a Cashless Economy

The Central Bank of Nigeria (CBN) has begun the execution of its cashless policy through the imposition of over-the-counter cash withdrawal limit for Nigerian banks today, January 9, 2023.

The new policy of Cash Withdrawal Limit, which was announced on December, 2022, was further amended to increase the amount of over-the-counter cash withdrawals from Deposit Money Banks (DMBs) to N500,000 per day for individual customers and N5 million per day for corporate customers. The initial limit was N100,000 and N500,000 weekly withdrawal for individual and cooperate entities respectively.

In the event of enthralling situation, cash withdrawal exceeding the limits required for legitimate purposes will attract a processing fee of 3% for individuals and 5% for corporate organizations. On this note where cash withdrawal exceeds the stipulated limit, DMBs and other financial institutions are directed to obtain some information from the customer, at the minimum, and upload the same on the CBN portal created for the purpose.

The policy is part of the sequential changes the bank had made recently including the redesign and introduction of the new Naira notes.

The CBN in a statement said the policy was aimed at reducing the amount of physical cash in circulation, reduce cash transaction in the economy thereby promoting the use of electronic payment systems, and encouraging financial inclusion.

The CBN Governor, Godwin Emefiele, said the policy would also help reduce the cost of printing currency and also reduce the risk associated with handling large amounts of cash. He added that banks would be required to ensure that customers are made aware of the policy and its implications, and that they should ensure that customers’ transactions are in line with the new limits.

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The CBN also announced that it would monitor and enforce compliance with the policy to ensure that it achieves its objectives while urging Nigerians to make use of the available digital payment channels such as the Point of Sale (PoS) machines, Mobile Money, and the various online payment platforms.

CBN's cashless policy was first introduced in 2012 under the former CBN boss, Sanusi Lamido. The cashless policy aims at reducing the quota of physical cash that is being used in the system in order to minimize the apex bank's cash management expenditure. It was first experimented in Lagos, and in 2017, the Bank tried the cashless policy at moderate level in Abuja. The current policy is going to have a nationwide effect and expected to become part of Nigeria's permanent economic and fiscal stratagem.