CBN increases weekly withdrawal limit to N500k for individuals

The Central Bank of Nigeria (CBN) has increased the maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations to N500,000 and N5 million, respectively.

The new directive supersedes the previous one released two weeks ago that reduced individuals’ weekly over-the-counter cash withdrawal limit to N100,000 and that of corporate organisations to N500,000 and would take effect nationwide from January 9, 2023.

According to The Cable, the directive is contained in a circular issued by the bank on Wednesday and signed by Haruna Mustafa, director of the banking supervision department.

Also, the apex bank reduced withdrawals at automated teller machines (ATMs) and point-of-sale terminals to N20,000 daily.

Before the introduction of the cashless policy by the CBN in 2011, Nigeria’s economy was heavily cash-oriented in its transaction of goods and services, contrary to global trends. So, Point of Sale (PoS) and internet transactions have always been focal points of the cashless policy, such that when PoS transactions fail, there is an outcry.

Before the introduction of the cashless policy by the CBN in 2011, Nigeria’s economy was heavily cash-oriented in its transaction of goods and services, contrary to global trends. So, Point of Sale (PoS) and internet transactions have always been focal points of the cashless policy, such that when PoS transactions fail, there is an outcry.

The previous policy generated mixed reactions from Nigerians, with several business owners complaining that it would affect their businesses negatively. However, some experts believed that the limit proposed would be of huge benefit to the Nigerian economy as it would boost the cashless policy.

Members of the federal house of representatives called for a review of the directive while the CBN explained that it was a strategic move to reduce the amount of cash outside the banking system.

After meeting with President Muhammadu Buhari at his native hometown of Daura in Katsina state, CBN governor, Godwin Emefiele said the Nigerian economy was overdue to go cashless as the Federal Government had sufficiently invested in the required payment system infrastructure to make the transition seamless.

Read more: CBN defends cash withdrawal limit policy before Senate despite Reps’ disapproval

CBN’s new directive on weekly withdrawal limits

In the circular, the CBN said it did the upward review based on feedback received from stakeholders.

“The Central Bank of Nigeria (CBN) hereby makes the following reviews: (1) the maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000.00 and N5,000,000.00 respectively,” the circular reads.

“2. In compelling circumstances where cash withdrawal above the limits in (1) is required for legitimate purposes, such requests shall be subject to a
processing fee of 3 per cent and 5 per cent for individuals and corporate organisations, respectively.

“Further to (2) above, the financial institution shall obtain the following information from the customer, at the minimum, and upload same on the CBN portal created for the purpose: valid means of identification of the payee (national ID, international passport, or driver’s license), bank verification number (BVN) of the payee, tax identification number (TIN) of both the payee and the payer, and an approval in writing by the MD/CEO of the financial institution authorising the withdrawal.

“Third party cheques above N100,000 shall not be eligible for payment over-the-counter, while the extant limit of N10 million on clearing cheques still subsist.”

Read also: Nigerians lament the new CBN withdrawal limit

The CBN said monthly returns on cash withdrawal transactions above the specified limits should be rendered to the banking supervision department, other financial institutions’ supervision and payments system management departments.

“Compliance with extant AML/CFT regulations relating to KYC, ongoing customer due diligence and suspicious transaction reporting etc., is required in all circumstances,” it added.

“Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.

The apex bank said it recognises cash’s vital role in supporting underserved and rural communities. It would ensure an inclusive approach as it transitions to a more cashless society.

“All banks and OFls are to note that aiding and abetting the circumvention of this policy will attract severe sanctions,” CBN said.

“The above directives supersede that of December 6, 2022 and take effect nationwide from January 9, 2023.”

It will be exciting to see how Nigerians,m especially fintech startups, POS operators and small business owners who deal primarily with cash, respond to this development.