Serious Alarm Over New CBN Cash Withdrawal Limit Policy

A cross-section of traders and artisans on Tuesday expressed concern about the new policy of the Central Bank of Nigeria (CBN) limiting cash withdrawal to N100,000 per week for individuals and N500,000 for organisations. 

This is even as experts expressed worry over the policy’s effect on the informal sector players who live in rural areas where there are no bank branches, just as some bank customers are concerned about the possibility of increased bank charges. 

In his reaction to the policy which will take effect from January 9, 2023, a building contractor, Mr Abiodun Taiwo, said the policy would make life difficult for many Nigerians given the poor state of internet connectivity in the country. 

According to him, “Twice last week, I attempted to pay for services and goods with my ATM card but despite the decline given by the POS machine, I was debited by my bank. I was later asked to go to my bank to resolve it. If the deducted money was all I had in my account how would I have coped? How can the CBN impose a limit to cash withdrawal without taking care of all these hitches? It is akin to subjecting Nigerians to unnecessary hardship.” 

A woman who deals in farm produce, Mrs Fatimo Alao, wondered how she would pay farmers for their produce without having cash. 

She said, “This business is cash and carry. Usually, we go to farms to buy from farmers every other day. Oftentimes, we buy items worth over N100,000 from the farmers. How are we going to pay when we cannot access more than N20,000 per day. We can’t stop the government from rolling out their policies but they should also bear in mind the fact that Nigeria goes beyond the major cities such as Lagos, Abuja and Ibadan. There are many villages without electricity, internet and even banks, how will the residents survive without cash?” 

However, Mr Tunde Oyinlade, lauded the apex bank for going ahead with the cashless policy, saying monetary policies would always falter when the bulk of the money in circulation is outside the banks. 

“I think one major effect of the policy is that it will stop politicians from throwing money around. This is electioneering period and they are warming up for vote buying. With this policy, it will be difficult for them to do that,” Oyinlade said. 

The CBN had directed all deposit money banks (DMBs) and other financial institutions (OFIs) to peg weekly Over-The-Counter (OTC) cash withdrawal at N100,000 for individuals and N500,000 for companies. The apex bank also directed banks to ensure that the maximum cash withdrawal per week via Automated Teller Machine (ATM) shall 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 point of sale (PoS) terminal shall be N20,000 daily. 

“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,” the CBN stated in a letter to All Deposit Money Banks and Other Financial Institutions, Payment Service Banks (PSBs) Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs). 

Signed by the Director of Banking Supervision CBN, Haruna B. Mustafa, and titled: Naira redesign policy – Revised cash withdrawal limits, the CBN letter stated that withdrawals above these limits shall attract processing fees of 5 per cent and 10 per cent, respectively. 

The apex bank added that in compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits is 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 these shall be subject to the referenced processing fees above, in addition to enhanced due diligence and further information requirements,” the letter stated.