The Central Bank of Nigeria (CBN) has announced a new policy that limits the cash withdrawal of individuals and organizations, which will become effective on January 9, 2023.
According to a memo released by the CBN on Tuesday, Deposit Money banks and other financial institutions are required to make sure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100, 000 and N500, 000, respectively, per week.
This also include point-of-sale machines or automated teller machines.
The revised cash withdrawal cap was implemented in accordance with the Central Bank of Nigeria’s (CBN) cashless policy and came after President Muhammadu Buhari introduced the redesigned naira notes on November 23, 2022.
Haruna Mustafa, the Director of Banking Supervision at the CBN, signed a statement instructing banks to only put N200 and lower denominations into their ATMs. This means that when the directive goes into effect, Nigerians will only be able to withdraw N20,000 from ATMs each day.
However, there is an exception that, under certain conditions, permits up to N5 million for private persons and N10 million for business organizations each month.
In the letter to all banks and other financial institutions, it was indicated that any cash withdrawals made above the specified amount would be subject to a processing fee of 10% for businesses and 5% for individuals.
For such compelling circumstances, the CBN stated some material that must be uploaded to the CBN portal specifically set up for that purpose.
These details include a valid form of identification for the payee (such as a national ID, a passport from another country, or a driver’s license), the payee’s bank verification number, a notarized customer declaration of the reason for the cash withdrawal, senior management approval for the managing director of the drawee, if applicable, and written authorization for the withdrawal from the managing director/CEO of the bank.
The CBN mandated that the banks supervision division receive monthly returns on cash withdrawal transactions that exceeded the predetermined thresholds.
The memo reads
“Please further note the following: i. Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the Banking Supervision Department. ii. Compliance with extant AMUCFT regulations relating to the KYC, ongoing customer due diligence and suspicious transaction reporting etc., is required in all circumstances.”
According to the letter, customers should be urged to carry out their banking transactions through other platforms, including online banking, mobile banking apps, USSD, card/PoS, and eNaira.
Lastly, the CBN issued a warning to banks, stating that any bank that encouraged the violation of this regulation would face harsh penalties.