A new directive for financial institutions requires the central bank to (CBN) said individuals can now withdraw just under $222 a week, while businesses can only withdraw no more than $1,111 in cash over the same period. The new restrictions, in line with CBN’s cashless policy, are expected to come into effect on January 9, 2023, according to the central bank.
Processing fees imposed on cash withdrawals over new limits
The Central Bank of Nigeria (CBN) recently announced changed cash withdrawal limits has an effective date of January 9, 2023. The announcement comes a few days before the country’s newly designed Naira banknotes go into circulation. The latest directive is “in line with CBN’s cashless policy,” according to the central bank’s December 6 open letter to financial institutions.
According to the letter, the maximum weekly over-the-counter (OTC) cash withdrawal by individuals and corporate organizations is just under 450 local currency units per dollar at the official exchange rate. CBN said there will be a “processing fee” of 5% and 10% respectively for cash withdrawals by individuals and businesses that exceed the new limits.
Cash withdrawals through ATMs will be limited to the equivalent of $222 per week, “subject to a maximum cash withdrawal of N20,000 [less than $44] per day,” the letter said. there is Cash withdrawal limits through POS machines are limited to less than $44 per day.
Special requirements for cash withdrawals in excess of limits
Meanwhile, the CBN letter also outlines the conditions under which cash withdrawals in excess of established limits are permitted.
“In compelling circumstances not exceeding once a month, where cash withdrawals in excess of the prescribed limits are required for legitimate purposes, such cash withdrawals shall be N5,000,000 [$11,111] and shall not exceed N10,000,000 [$22,222] each individual and corporate entity,” CBN said in the letter.
The central bank added that such withdrawals would be subject to processing fees and “enhanced due diligence and further information requirements.” Additionally, monthly returns for withdrawals in excess of prescribed limits must be submitted to CBN’s banking supervision department, the letter said.
After announcing plans to replace old banknotes with new Naira designs, CBN urged Nigerians to adopt cashless payment methods. The announcement is believed to have spurred the naira’s rapid decline, but the ensuing crackdown on so-called illegal currency dealers is believed to have helped the naira regain its lost position against the US dollar.
Meanwhile, the CBN letter concluded by warning of severe sanctions against anyone “aiding and encouraging the circumvention of this policy.”
SUBSCRIBE HERE TO GET WEEKLY UPDATES ABOUT AFRICA NEWS IN YOUR INBOX:
Image CreditsShutterstock, Pixabay, Wiki Commons