That CBN cash withdrawal limit
The Central Bank of Nigeria last week Tuesday put a limit on cash withdrawal made by individuals and organisations with effect from January 9, 2023.
In a memo signed by the Director of Banking Supervision, Haruna Mustafa, the apex bank directed all banks 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, respectively, per week.
The decision is coming after the CBN began the distribution of its newly redesigned bank notes. The bank said redesigning the notes will help check inflation, counterfeiting and corruption.
In the new development, CBN directed that only N200 and lower denominations should be loaded into banks’ ATM machines.
“Further to the launch of the redesigned naira notes by the President of the Federal Republic of Nigeria on Wednesday, November 23, 2022, and in line with the cashless policy of the CBN, all deposit money banks and other financial institutions are hereby directed to note and comply with the following:
“The maximum cash withdrawal over the counter by individuals and corporate organisations per week shall henceforth be N100,000 and N500,000 respectively. Withdrawals above these limits shall attract processing fees of 5 percent and 10 percent, respectively.
“Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist,” it read.
The bank also said the maximum cash withdrawal per week via ATM should be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
“Only denominations of N200 and below shall be loaded into the ATMs. The maximum cash withdrawal via the point of sale terminal shall be N20,000 daily,” the statement said
The CBN said in compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits would be required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000.00 and N10,000,000.00 for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees of 5 per cent for individuals and 10 per cent for corporate bodies in addition to other specified requirements.
It directed financial institutions to encourage their customers to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS. eNaira, etc.) to conduct their banking transactions.”
The apex bank warned of severe sanctions against any bank caught aiding and abetting the circumvention of the policy.
The policy has however been generating different reactions from Nigerians since the news broke with some hailing the CBN while the opposing side is of the view that the apex bank is only interested in compounding matters for the citizens
It was on this note that the House of Representatives last week Thursday, asked the Central Bank of Nigeria to suspend its latest policy which, among others, sets limits to cash withdrawals at deposit money banks and other financial institutions.
Consequently, the House summoned the Governor of the CBN, Godwin Emefiele, to come and explain the policy to the parliament. He is to appear before the lawmakers on Thursday.
Several lawmakers reportedly warned that the policy would have serious consequences and adverse effects on businesses and Nigerians who have no access to the banking system.
The Minority Leader, Ndudi Elumelu, however, said the policy would check crimes as funds would now be tracked through the banking system. He said though the timing might be wrong, the country would benefit more from it.
The CBN Deputy Governor on Financial System Stability, Mrs. Aishat Ahmad has however defended this policy when she appeared before the Senate panel, alongside her counterpart on Corporate Services, Edward Lametek Adamu.
Mrs Ahmad among other things disclosed that the policy was in furtherance of the cashless economy of the country which started some 10 years ago.
She reiterated the various options open to Nigerians to perform financial transactions including mobile money, USSD, Internet banking, mobile apps, eNaira, agents and mobile POS, among others.
She said all of these would ensure that Nigerians would seamlessly adapt to the cashless policy to enable financial inclusion and economic growth pledging CBN’s commitment to ensuring that Nigerians in the rural areas and informal sector are not disenfranchised.
Many Nigerians who are at home with the policy have said that it will help to fight corruption since every huge transaction would leave a trail behind.
Other benefits of the policy include helping to reduce money in circulation and thereby curbing inflation, checking the unwholesome habit of currency hoarding, helping to encourage financial inclusion such that many Nigerians would be forced to embrace keeping their money in the banks.
The policy is also expected to help in the area of security as those who kidnap for ransoms would be finding the game more difficult since people won’t be able to go about again with heavy cash among others.
And as another general elections is about two months away, many Nigerians are also of the opinion that the storage of heavy cash by the politicians for vote buying would have been substantially reduced if not curbed by this policy.
As good as this policy is, it is however believed that the over 1.4m POS operators in the country may be affected due to the daily cash withdrawal limit of N20,000. These POS agents earnings are largely from withdrawals and with this daily cash withdrawal limit, the fear is that many of them might soon be out of business.
Another fear being entertained over these policies has to do with the rural dwellers, majority of who don’t have bank accounts but rely on daily cash transactions.
Some are also of the opinion that the prerequisites infrastructure for this kind of policy like good network, regular power supply to charge the platforms to use like phones, the issues of fake alert, the cyber fraud common with online banking among others are some of the challenges that came with this policy.
It is however believed that while this new cash limit might come with some challenges, the gains far outweigh the disadvantages.
Many believe that cashless economy just like it is in the developed world is the way to go for the country. The disadvantages highlighted are said to be some of the issues that will eventually resolve itself as time goes on, though that is not to say everything will be Eldorado, but largely the country would have been able to fight off some of those unpatriotic elements weakening her economy.
