By Bassey Udo
Effective January 9, 2023, the maximum weekly cash withdrawal by individual bank customers over the counter (OTC) will be limited to N100,000, the Central Bank of Nigeria (CBN) announced on Tuesday.
The new withdrawal limit contained in a circular to
all Deposit Money Banks (DMBS) and other financial institutions by the CBN Director of Banking Supervision, Haruna Mustafa, said corporate customers would not be allowed to exceed the new withdrawal limit over the counter of N500,OOO per week.
The circular No. BSD/DIR/PUB/LAB/015/069 dated December 6, 2022 was titled “Letter to All Deposit Money Banks and Other Financial Institutions (Payment Service Banks, (PSBs, Primary Mortgage Banks,(PMBs) and Microfinance banks (MFBs)”.
Mustafa said the directive, which was in line with the CBN Cashless policy, would also affect third party cheques above N50,OOO, which would not be eligible for payment over the counter. The extant limits of N10 million on clearing cheques would however still subsist, the CBN added.
Again, the circular puts the maximum weekly cash withdrawal by customers through the Automated Teller Machine (ATM) at NI00,000 a week, subject to a maximum of N20,000 cash withdrawal per day.
Under the new policy directive, banks are expected to load only N200 bank notes and below denominations into the ATMs, while the maximum daily cash withdrawal through point of sale (POS) terminals was fixed at N20,000.
Regardless, the CBN said in compelling circumstances where cash withdrawals above the prescribed limits would be required for legitimate purposes, such cash withdrawals would attract 5 percent processing fees for individuals, and 10 percent for corporate organisations.
Besides, the apex bank said such withdrawals in excess of the stipulated limits for both categories cannot exceed once a month.
To enhance due diligence, the CBN directed the banks to ensure that they obtained and upload on its portal information about the customer’s valid means of identification (National ID, International Passport, Driver’s License), Bank Verification Number (BVN).
The Managing Director of
Corporate customers are expected to sign and submit to the bank a notarized declaration on the purpose for the cash withdrawal.
Also, the MD/CEO of the bank authorising the withdrawal above the stipulated limit by a customer was expected to submit in writing the approval, in addition to monthly returns to the Banking Supervision Department of the CBN on such cash withdrawal transactions above the specified limits.
The banks are also expected to ensure strict compliance with the extant anti-money laundering/combating financing of terrorism (AML/CFT) regulations relating to know your customers (KYC) documentation to ensure due diligence and reporting on suspicious transactions.
While encouraging bank customers to use alternative channels (like internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions, the CBN warned of severe sanctions against banks aiding and abetting the circumvention of the policy.
Analysts said the policy, which coming barely two weeks after the unveiling of the newly redesigned N1000, N500, and N200 Bank notes on November 23, 2022, was aimed at mopping up money out of the banking system, reducing liquidity in the financial system, promoting the cashless policy, fighting inflation, ensuring financial inclusion, boosting the value of the Naira and combating terrorism financing.
But critics said the policy might pose serious challenges to the smooth operation of micro, small and medium-scale enterprises, like POS operators, who rely on cash to carry out their businesses.