Following over two weeks of sustained complaints across the broad spectrum of the Nigerian public, including lawmakers in the National Assembly, on the potential negative implications of its cash withdrawal limits policy for national development, the Central Bank of Nigeria (CBN) has backed down on the controversial policy.
In a circular issued on the latest measure, the apex bank increased the weekly cash withdrawal limits for individuals to N500, 000 and for corporate organisations to N5 million, stating that the new measure became necessary following the feedback it received from stakeholders.
The CBN had about two weeks ago, apparently in its sustained efforts to minimize cash transactions in the economy, in a circular dated December 6, 2022 and signed by the CBN Director, Banking Supervision, Haruna Mustafa, stated that effective January 9, 2023, only N200 notes and below will be loaded by banks into their Automated Teller Machines (ATMs).
According to the circular, individuals and corporate organisations withdrawal limits are not to exceed N100,000 and N500,000 per week.
The apex bank clarified that withdrawals above these limits would attract processing fees of five per cent for individuals and 10 per cent for corporate organizations.
The CBN Director of the Payments System Management Department, Musa Jimoh, while justifying the bank’s policy measure on the cash withdrawal limits on Saturday, said the current cash withdrawal limit policy would help in tackling electronic fraud (e-fraud) in the financial system.
He explained: “As we envisage and begin to put some limits on the cash withdrawal that can happen daily the incidence of fraud would also tame down- because right now, they steal huge amounts of money, and then at about from 2 am to 3 am, they go to an ATM and withdraw everything.
“But right now, with the policy on limits, you would not be able to take as much and the system will be able to trace and block such accounts before the money is taken away.
“So, this cashless limit is also a way of deterring fraudsters from taking other people’s money”, Jimoh added.
However, the apex bank in its latest Circular No BDS/DIR/PUB/LAB/015/073 dated December 21, 2022, signed by the Director of Banking Supervision, Haruna Mustafa, and titled ‘Letter to all Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs), Payment Service Banks (PSBs), Primary Mortaage Banks (PMBs), Microfinance Banks (MFBs), Mobile Money Operators (MMOs) and Agents, specifically raised the cash withdrawal limits for individuals and corporates to N500,000 and N5 million per week.
The circular reads, inter alia: “In compelling circumstances where cash withdrawals above the limits in (1) above is required for legitimate purposes, such requests shall be subject ot a processing fee of 3% and 5% for individuals and corporate organizations respectively.
“Further to above, the financial institution shall obtain the following information, at the minimum, and upload same on the CBN portal created for that purpose: (a) Vaild means of identification of the payee (National ID, International Passport or Driver’s Licence); (b) Bank Verification Number (BVN) of the payee; (c) Tax Identification Number (TIN) of both the payee and the payer; and (d) Approval in writing by the MD/CEO of the financial institution authorising the withdrawal.
“Third party cheques above N100,000 shall not be payable over the counter while the extant limit on N10 million on clearing cheques still subsists”, it added.
While stating that the measures were aimed at sanitising the financial system and in alignment with the AML/CFT regulations relating to KYC, the apex bank acknowledged the roles cash plays in supporting underserved and rural communities and would ensure inclusive approach as it implements the transition to a more cash-less society.
It cautioned all banks and OFIs against aiding and abetting the circumvention of the latest policy and threatened that any act of sabotage would attract severe sanctions.
