Some Nigerian politicians have objected to the Central Bank of Nigeria’s policy, fearing how it will affect their way of life and political campaigns. The Senate has decided to critically examine the policy the following week.
According to the new policy 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.
Individuals will only be permitted to withdraw N100,000 per week (from over-the-counter, Point Sale Machines, or Automated Teller Machines), while organizations will be permitted to access N500,000 per week, according to a new memo to banks sent on Tuesday and signed by the Director of Banking Supervision, Haruna.B. Mustafa.
Banks have also been directed to load only N200 and lower denominations into their ATM.
The memo read, “Further to the launch of the redesigned naira notes by the President, Major General Muhammadu Buhari (retd.), on Wednesday, November 23, 2022, and in line with the cashless policy of the CBN, all deposit money banks and other financial institutions are hereby directed to note and comply with the following:
“1. The maximum cash withdrawal over the counter by individuals and corporate organisations per week shall henceforth be N100,000 and N500,000 respectively. Withdrawals above these limits shall attract processing fees of 5% and 10%, respectively.
“2. Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.
“3. The maximum cash withdrawal per week via Automated Teller Machine shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
“4. Only denominations of N200 and below shall be loaded into the ATMs.
“5. The maximum cash withdrawal via the point of sale terminal shall be N20,000 daily.”
The CBN said in compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits would be required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000.00 and N10,000,000.00 for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees in (1) above, in addition to enhanced due diligence and further information requirements.
It also said banks were required to obtain the following information at the minimum and upload the same on the CBN portal created for the purpose:
“a. Valid means of identification of the payee (National Identity Card, International Passport, Drivers License.).
“b. Bank Verification Number of the payee.
“c. Notarised customer declaration of the purpose of the cash withdrawal.
“d. Senior management approval for the withdrawal by the Managing Director of the drawee, where applicable.
“e. Approval in writing by the MD/CEO of the bank authorising the withdrawal.
“Please further note the following: i. Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the Banking Supervision Department.
ii. Compliance with extant AMUCFT regulations relating to the KYC, ongoing customer due diligence and suspicious transaction reporting etc., is required in all circumstances.
iii. Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS. eNaira, etc.) to conduct their banking transactions.
“Finally, please note that aiding and abetting the circumvention of this policy will attract severe sanctions.
“The above regulatory directives take effect nationwide from January 9, 2023. Please be guided accordingly,” the memo added.
However, speaking on the pros and cons of the new law by the Central Bank of Nigeria, Mr Tunji Olatunji, a financial and development economy expert said, starting with the state of the Nigeria economy, this policy if well implemented, will go a long way in the recovery of the Nigeria economy.
“Nigeria’s economy is largely informal and therefore most of the monitory policies of the CBN has little or no significant impact when they are made so it makes it appear that some of these policies are not effective…”
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