BREAKING: CBN reduces over-the-counter withdrawals to N100k, N500k per week for individuals, companies

According to a new regulation that the Central Bank of Nigeria (CBN) has announced, deposit money banks and other financial institutions must make sure that over-the-counter cash withdrawals by both individuals and corporate entities do not exceed N100,000 and N500,00 per week, respectively.

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The updated cash withdrawal restrictions would be in force nationally starting on January 9, 2023, according to a circular released today by the apex bank.

The freshly revised N200, N500, and N1000 banknotes were introduced by President Muhammadu Buhari just a few weeks prior to the implementation of the new policy.

Any third-party checks that are worth more than N50,000 won’t be processed over the counter by any bank in accordance with the new cash withdrawal caps. According to the CBN, there are still “extant limits of N10,000,000 on clearing cheques.”

The amount that each person may withdraw each week from an ATM would be lowered to N100,000. A daily withdrawal cap of N20,000 will also apply to withdrawals made using this method.
In a similar vein, N20,000 is the daily withdrawal cap for POS terminal withdrawals.

It should be noted that only N200 and below will be made available through the channel, therefore the new N500 and N1000 banknotes cannot be withdrawn through ATMs.

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According to the CBN, there is a clause that allows both individuals and corporations to withdraw N5 million and N10 million once each month, respectively. This is only applicable in exceptional circumstances, and all parties wishing to make use of this clause must offer convincing proof of their bona fide business objectives.

“In compelling circumstances, not exceeding once a month, where cash withdrawal above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5, 000,000 and N10, 000, 000 for individuals and corporate organizations, respectively, and shall be subject to the referenced processing fees in (1) above, in addition to the enhanced due diligence and further information requirements.”

Individuals and corporate entities must supply the following details to be eligible for this exception:

• Valid means of identification.
• Bank verification number (BVN)
• Notarised declaration by the customer stating the reason for the excess cash withdrawal.
• Written approval by the Managing Directors for drawees withdrawing on behalf of companies.
• The CEOs of banks must authorize such withdrawals in writing.

According to the CBN, the revised cash withdrawal limit guideline is consistent with its cashless policy. The ultimate goal is to persuade more Nigerians to conduct their banking activities through alternate channels. These alternate channels include, for instance, mobile banking, USSD, debit cards, POS, eNaira, etc.

The measure is also a part of the apex bank’s plans to safeguard against abuse, forgery, and stockpiling of the freshly redesigned banknotes.
Given the recent news that the money supply in the Nigerian economy increased to an all-time high of N49 trillion in August, this is extremely crucial.

Inflation is caused by an excess of money in circulation. Additionally, Nigeria has struggled with a high inflation rate that reached 21.09% in October 2022. In response, the CBN raised the benchmark interest rate (MPR) to 16.5% during its final Monetary Policy Committee (MPC) meeting of the year, an increase of 100 basis points.