On December 6, 2022, the Central Bank of Nigeria (“CBN”) issued a circular to all Deposit Money Banks (“DMBS”) Payment Service Banks (“PSBs”), Primary Mortgage Banks (“PMBs”) as well as Microfinance Banks (“MFBs”) revising cash withdrawal limits (“the Circular”). This directive was issued sequel to the launch of the newly redesigned Naira notes by the President on November 23, 2022.
The salient provisions of the Circular, which will take effect on January 9, 2023, are as follows:
- Revised Limit on Withdrawals: The maximum cash withdrawal over the counter by individuals and corporate bodies per week is now capped at N100,000 and N500,000 respectively. Any withdrawal above these limits will attract processing fees of 5% for individuals and 10% for corporate bodies. Cash withdrawals exceeding the limits will only be allowed once a month and cannot exceed N5,000,000 for individuals and N10,000,000 for corporates. Such withdrawals are subject to processing fees.
Also, third-party cheques above N50,000 shall not be eligible for payment over the counter, while the limit of N10,000 on clearing cheques remains unchanged.
The maximum cash withdrawal via point of sale (PoS) terminal is now N20,000.00 daily and ATMs will now only be loaded with denominations of N200.00 and below.
- Due Diligence: Where a customer wishes to withdraw cash more than the maximum withdrawal limit, the fin ancial institutions concerned shall obtain and upload the following information on the CBN portal created for the purpose of same:
- Valid means of ID (national ID card, international passport, driver’s license) of the payee.
- Bank verification number of the payee.
- Notarized customer declaration of the purpose for the cash withdrawal.
- Senior management approval for the withdrawal by the Managing Director of the payee, where applicable.
- Approval in writing by the MD/CEO of the bank authorizing the withdrawal.
In addition to the foregoing, financial institutions will now be required to render monthly returns on withdrawal transactions above the specified limit to the Banking Supervision Department and ensure continued compliance with the existing AML/CFT regulations relating to KYC in all circumstances.
- Use of Alternative Channels for Banking Transactions: Financial institutions are to encourage customers to use digital channels to conduct their banking transactions.
The Circular has sparked a lot of comments and raised questions regarding the impact of implementation of the directives. These include concerns on whether the policy represents the immediate redemptive plan for the eco nomy, the survival of PoS terminal operators and the impact of the policy on the unbanked, as well as small and medium-scale businesses in Nigeria.