The Central Bank of Nigeria (CBN) on Tuesday announced a new policy requiring deposit money banks (DMBs) and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100, 000 and N500, 000 per week respectively.
The revised cash withdrawal limit, which was contained in a circular issued by the apex bank and takes effect from January 9, 2023 is in furtherance of the apex bank’s cashless policy.
The bank stated that after the commencement of the policy, all cash withdrawals above the stated limits will attract processing fees of 5% and 10%, respectively.
The circular clarified that in line with the new cash withdrawal limits, any third-party cheques above N50, 000 will not be processed over the counter by any bank and that the “extant limits of N10, 000, 000 on clearing cheques still subsist”.
Expatiating on the policy measure, the CBN also stated that weekly withdrawals through automated teller machines (ATMs) will be reduced to N100, 000 per individual, adding that withdrawals through this channel will also be subject to an N20, 000 daily withdrawal limit.
Similarly, it stated that the daily withdrawal limit through a Point of Sale (PoS) terminals would be N20, 000 even as it notified the public that the new N500 and N1000 banknotes will not be withdrawn through ATMs, as only N200 and below will be made available through the channel.
However, the CBN stated that there was also a provision for individuals and corporates to withdraw N5 million and N10 million, respectively, once a month, adding that this is only for rare occasions and all parties intending to take advantage of this provision must provide compelling evidence of legitimate business purposes.
It clarified: “In compelling circumstances, not exceeding once a month, where cash withdrawal above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5, 000,000 and N10, 000, 000 for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees in (1) above, in addition to the enhanced due diligence and further information requirements.”
To qualify for this exception, the apex bank stated that individuals and corporate organisations must provide valid means of identification; Bank verification number (BVN); notarized declaration by the customer stating the reason for the excess cash withdrawal; written approval by the Managing Directors for drawees withdrawing on behalf of companies; and that the CEOs of banks must authorize such withdrawals in writing.
The apex bank pointed out that the latest policy on revised cash withdrawal limits aligned with its cashless policy aimed at encouraging more Nigerians to use alternative channels such as mobile banking, USSD, debit cards, PoS, eNaira and others for their banking transactions.
