From January 9, the CBN will impose restrictions on cash withdrawals.
The Central Bank of Nigeria (CBN) has announced that withdrawals from the nation’s banking system will be restricted starting on January 9, 2023.
This was stated in a circular dated December 6, 2022, with reference number SD/DIR/PUB/LAB/015/069 and the title “Letter to All Deposit Money Banks (DMBS) and Other Financial Institutions, Payment Service Banks, Primary Mortgage Banks and Microfinance Banks.” It was issued by Haruna Mustafa, director of banking supervision.
Haruna Mustafa, banking supervision, “Letter to All Deposit Money Banks (DMBS) and Other Financial Institutions, Payment Service Banks, Primary Mortgage Banks and Microfinance Banks,” December 6, 2022, SD/DIR/PUB/LAB/015/069 as reference number.
According to CBN, the circular is consistent with the apex bank’s cashless agenda.
All deposit money banks and other financial institutions were instructed to take note of and abide by a number of guidelines in the circular.
Beginning on January 9, which is the second Mo, CBN ordered that the weekly maximums for cash withdrawals made over the counter (OTC) by both individuals and business organizations would be N100,000 and N500,000, respectively.
The bank further indicated that withdrawals above these thresholds would incur processing costs of 5% and 10%, respectively. “Third party cheques beyond N50,000 shall not be acceptable for payment over the counter, although the existing clearing cheque limits of N10,000,000 remain in effect,” it stated. An Automated Teller Machine (ATM) may only be used to withdraw a maximum of N820,000 in cash per day and N100,000 per week.
Chief Executive Officer of Diary Hills Limited, Kelvin Emmanuel, responded by saying that the move to limit cash withdrawals as part of the naira redesign program as a way to reduce inflation is evidence that the Central Bank’s monetary policy section has run out of good ideas.
“It is difficult to find the logic in making regular cash withdrawals an activity that the very informal economy thrives on,” he said. “In an economy with a 55.5 percent unbanked population, 38.7 percent Internet penetration rate, enabling 17 ATMs, 147 POS machines, and four bank branches per 100,000 Nigerians.”