In a new directive to financial institutions, the Central Bank of Nigeria (CBN) said individuals can now only withdraw just under $222 per week, while businesses can only withdraw cash not exceeding $1. $111 during the same period. The new limits, which are in line with the CBN’s cashless policy, are expected to come into effect on January 9, 2023, the central bank said.
Processing fee to be levied on cash withdrawals exceeding the new limits
The Central Bank of Nigeria (CBN) recently announcement the revised cash withdrawal limits which will come into effect on January 9, 2023. The announcement comes just days before the country’s new naira banknotes start circulating. According to the central bank’s Dec. 6 open letter to financial institutions, the latest directive is “in line with the CBN’s cashless policy.”
According to the letter, the maximum weekly over-the-counter (OTC) cash withdrawal by individuals and businesses will be equivalent to $222 (N100,000) and $1,111 (N500,000), respectively, using the official exchange rate of less than 450 local currency units for every dollar. For any cash withdrawals by individuals and businesses that exceed the new limits, the CBN said these will incur a “processing fee” of 5% and 10% respectively.
For cash withdrawals through the ATM, the letter said these would be limited to an equivalent of $222 per week “subject to a maximum of N20,000 [under $44] cash withdrawal per day. Cash withdrawal limits via POS machines will be limited to less than $44 per day.
Special requirements for cash withdrawals over limits
Meanwhile, the CBN letter also outlined the conditions under which cash withdrawals exceeding the set limits are permitted.
“In compelling circumstances, not exceeding once a month, where cash withdrawals in excess of prescribed limits are required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000 [$11,111] and N10,000,000 [$22,222] for individuals and businesses, respectively,” the CBN said in the letter.
The central bank added that such withdrawals will be subject to processing fees as well as “enhanced due diligence and additional information requirements”. In addition, monthly statements of withdrawals exceeding the prescribed limits must be submitted to the CBN Banking Supervision Department, the letter said.
After announcing its intention to replace the old notes with newly designed naira notes, the CBN urged Nigerians to embrace cashless payment methods. Although the announcement is believed to have sets off the rapid depreciation of the naira, the subsequent crackdown on so-called illegal currency dealers is said to have helped the naira retrieve lost ground against the US dollar.
The CBN’s letter, meanwhile, ends with a warning of severe penalties for those “aiding and abetting the circumvention of this policy.”
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