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CBN sets cash withdrawal limits to boost its cashless policy

Effective January 9, 2023, the Central Bank of Nigeria (CBN) has revised withdrawal limits to ensure a cashless economy.

CBN sets cash withdrawal limits to boost its cashless policy
About-to-be obsolete ₦500 notes 

The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMOs) and other financial institutions to ensure that weekly over-the-counter (OTC) cash withdrawals by individuals and corporate entities do not exceed ₦100,000 and ₦500,000, respectively.

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.

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As of October 2022, over 80% of Naira notes in circulation were outside the vaults of commercial banks, according to the CBN. 

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.

According to the CBN, 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.