Nigeria Announces New Cash Withdrawal Restrictions – Recently, the Central Bank of Nigeria (CBN) announced the revised cash withdrawal limits that will go into effect on January 9, 2023. The announcement comes just days before the country’s newly designed naira banknotes start circulating. According to the central bank’s open letter to financial institutions dated December 6, the latest directive is “in line with the CBN’s cashless policy.”
The letter states that the weekly maximum over-the-counter (OTC) cash withdrawal limit for individuals and corporate organizations will be $222 (N100,000) and $1,111 (N500,000), respectively, using the official exchange rate of just under 450 local currency units per dollar. The CBN stated that withdrawals in excess of the new limits by individuals and corporations would incur a “processing fee” of 5% and 10%, respectively.
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For cash withdrawals via the ATM, the letter said these would be restricted to an equivalent of $222 per week “subject to a maximum of N20,000 (under $44) cash withdrawal per day.” Cash withdrawal limits via point-of-sale machines will be restricted to less than $44 per day. Meanwhile, the CBN’s letter also outlined conditions under which cash withdrawals that exceed the set limits are permitted.
“In compelling circumstances, not exceeding once a month, where cash withdrawals above the 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 corporate organizations, respectively,” the CBN said in the letter.
Such withdrawals will incur a processing fee and be subject to “enhanced due diligence and additional information requirements,” according to the central bank. In addition, monthly returns must be submitted to the CBN’s banking supervision department for withdrawals exceeding the prescribed limits, the letter stated.
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After announcing its intention to replace old naira banknotes with newly designed ones, the CBN has urged Nigerians to adopt cashless payment methods. Although the announcement is believed to have triggered a rapid depreciation of the naira, the subsequent crackdown on so-called illegal currency dealers is believed to have helped the naira recover some of its lost ground against the U.S. dollar. In the meantime, the CBN letter concludes with a warning of severe sanctions for those who “aiding and abetting the circumvention of this policy.”
