Following the outburst from the general public and intense criticism from various institutions, the Central Bank of Nigeria (CBN) has succumbed by increasing the maximum cash withdrawals per week across all channels by individuals and corporate institutions to N500,000 and N5 million, respectively.
The new policy is contained in a circular issued by the bank on Wednesday, December 21st, 2022, and signed by Mr. Haruna Mustafa, the director of the banking supervision department.
The development comes about 14 days after the CBN director reduced the weekly cash withdrawal limit for individuals to N100,000 and that of corporate organizations to N500,000 both from counter, at automated teller machines (ATMs) and from point-of-sale (POS)terminals to N20,000 per day.
As you would expect, the directive generated mixed reactions from Nigerians. While some said it would have a negative small business, others applauded it as a static move towards boosting the cashless policy, reducing the amount of cash outside the banking system, curbing election malpractices and kidnapping syndromes
In the circular, the apex bank said it decided to upscale the withdrawal limit in response to feedback received from stakeholders.
The circular reads: “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 organizations shall be N500,000.00 and N5,000,000.00 respectively,”.
“2. In compelling circumstances where cash with organizations the limits in (1) are required for legitimate purposes, such requests shall be subject to a
processing fee of 3 percent and 5 percent for individuals and corporate organizations, 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.
CBN also explains that third-party cheques above N100,000 would not be eligible for payment over the counter, while the extant limit of N10 million on clearing cheques remains.
The CBN added that monthly returns on cash withdrawal transactions above the stated limits should be rendered to the banking supervision departrecognizesr 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 (sic) 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 conclusive said it recognises the vital role that cash plays in supporting ordinary people and rural communities and would ensure an inclusive approach as it implements the transition to the more cashless society we dreamt of.
“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.”