Breakdown Of CBN New Money Policy

CBN

Why CBN reduced over-the-counter withdrawals to N100k, N500k per week for individuals, companies.

The Central Bank of Nigeria (CBN) has announced a new policy that mandates deposit money banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100, 000 and N500, 000, respectively, per week.

The revised cash withdrawal limits, contained in a circular issued today by the apex bank and seen by Nairametrics, will take effect nationwide on January 9, 2023.

After the policy takes effect, all cash withdrawals above the stated limits will attract processing fees of 5% and 10%, respectively.

The new policy is coming barely weeks after President Muhammadu Buhari launched the newly redesigned N200, N500, and N1000 banknotes.

More Details

In line with the new cash withdrawal limits, any third-party cheques above N50, 000 will not be processed over the counter by any bank.  The CBN said the “extant limits of N10, 000, 000 on clearing cheques still subsist”. Withdrawals above these limits shall attract processing fees of 5% and 10%, respectively.

According to the CBN Director, Banking Supervision Department, Haruna Mustafa, this is in line with the bank's cashless policy strategy. 

During the first anniversary of Nigeria's digital currency—eNaira, Godwin Emefiele, the Governor of the CBN said the bank wants to achieve a 100% cashless economy.

"The destination as far as I am concerned is to achieve a 100% cashless economy in Nigeria. I know that those who doubt us will say that 100 per cent cashless is unattainable.

 Yes, it is true, but Nigeria must move from being a predominantly cash economy to a predominantly cashless economy," Emefiele said.

The new regulation is coming a few days after the CBN unveiled the redesigned Naira notes that intend to reduce significant hoarding of banknotes by members of the public, and combat counterfeiting and shortage of clean Naira notes.

 Recall that, last month, the CBN's spokesperson, Osita Nwanisobi disclosed that as part of efforts to ensure full compliance with the Naira redesign deadline, the CBN directed banks to accept cash deposits beyond the cashless policy threshold. In a statement released by Mustafa on Tuesday (December 6, 2022), the cash withdrawal limits—aside from the aforementioned—include:

The maximum cash withdrawal per week via Automated Teller Machine (ATM) shall be ₦100,000 subject to a maximum of ₦20,000 cash withdrawal per day . Also, only denominations of N200 and below shall be loaded into the ATMs.

Third-party cheques above ₦50,000 shall not be eligible for payment over the counter, while extant limits of ₦10,000,000 on clearing cheques still subsist. The maximum cash withdrawal via point of sale (POS) terminal shall be N20,000 daily.

CBN said, in "compelling circumstances" where cash withdrawal above the revised limit is required for a "legitimate purpose", the individual or corporate organisation will provide valid means of identification—including a bank verification number, letter for the purpose of withdrawal and approval from the managing director CEO—for corporate transactions...

Highlight of the New CBN New  Policies on Cash Withdrawal

1. N100,000 and N500,000 weekly limit for personal and corporate accounts 

2. Amounts above that limit attract a 5% and 10% processing charge respectively

3. Maximum withdrawal limit from ATM becomes N20,000 daily and N100,000 weekly

4. Only N200 notes will be loaded into the ATM

5. Maximum withdrawal via POS becomes N20,000 daily

6. In exceptional cases and not more than once a month, the amounts of N5m and N10m for personal and corporate accounts can be accessed. This will require approvals and payments of all effective charges (5% and 10% respectively).

Effective January 9, 2023