The limits placed on cash withdrawal for individuals and companies come into effect today.
Under the policy introduced on December 6, 2022 by the Central Bank of Nigeria (CBN), individuals can only withdraw a maximum of N500, 000 while corporate organisations can draw N5 million cash per week.
Also third-party cheques above N100, 000 are no longer eligible for payment over the counter. They would henceforth be paid into bank accounts.
However, if there is a compelling reason to withdraw cash in excess of the stipulated limits, “such requests shall be subject to a processing fee of three per cent and five per cent for individuals and corporate organisations, respectively”.
Before making withdrawals above the stated limits customers are required to submit: Valid means of identification of the payee (National ID, International Passport, or Driver’s License); Bank Verification Number (BVN) of the payee; Tax Identification Number (TIN) of both the payee and the payer; Approval in writing by the MD/CEO of the financial institution authorizing the withdrawal.
The cash withdrawal limits represent 400 per cent increase from the N100, 000 and N1 million initial limit announced by the CBN in its December 6, 2022 circular.
In several emailed notices to the banking public, banks yesterday stepped up sensitisation, urging customers to comply with the directive.
In an emailed note to investors, Managing Director, Stanbic IBTC Asset Management, Oladele Sotubo, said the policy will be implemented as announced by the CBN.
Experts and customers remained divided over the implementation of the policy.
Mr. John Nwagwu told The Nation that “it’s a policy that wasn’t properly thought through before implementation. Nigeria is a cash based society as such implementing policies like that requires a phasing process that is drawn out over a period of time”.
A development economist, Gabriel Uchenna, said: “It is a good development, and I want to suggest that the CBN implement it in phases. Areas like Lagos, Kano and Port-Harcourt can go first while others may follow. Also, a location modification may come, like in Urban or rural areas.
“N500, 000 is not too small on individual accounts but the issue is that it may force some people to stay completely outside the banking system. If you consider the people in the rural areas who are into commodity trading, they need far more than N500, 000 to trade and if you are telling them that you can only do N500, 000 in a week, these are people who do business to the tune of N3 million in a week because they buy and sell, such people will stay outside the banks and just be doing their business with cash”.
President, Bank Customers Association of Nigeria (BCAN), Uju Ogunbunka, said: “The policy is a good one given the benefits that come from cashless banking, but its timing and implementation process are not practicable based on weak IT infrastructure realities on ground.”
Ogunbunka said the CBN has good intention, but there are serious issues that are currently weighing against the policy implementation.
He said: “The policy is good, but the practical realities in the country are against its successful implementation. Nigeria is a cash-driven economy and no matter what anyone thinks, you cannot run away from that trend overnight.
“It is going to be a crisis. Power supply is bad and network connectivity in many rural areas is also bad or non-existent. Taking cash away from them will speed doom for the people.”
Ogunbunka noted that the economy was battling big problem with inflation and the strength of the naira is weak.
“What can N1, 000 buy? That means people will have to be frequenting the banks to get enough money to buy what they need. How many people spend N100, 000 a week? I am yet to see how a woman selling vegetables will be paid with cash transfer. The CBN needs to strengthen the infrastructure and get banks ready for takeoff,” Ogunbunka said.
He said there were many bank customers who do not believe in online transactions and will not change their minds overnight because of the negative experiences they have had with the channels.
According to him, the rising cases of e-fraud have frightened many cardholders out of the e-payment platform and returned to cash-based transactions.
“Convincing such people into embracing digital payment fully, will not be an easy task that will just happen overnight”, he said.
To Mrs. Solomon Foluke, “it’s just another way of making life difficult for the public. For instance, I and my husband are not salary earners, we do buying and selling. How are we going to meet up with demands from clients as most of the locals that we get our produce from don’t do transfer but raw cash? It’s not going to work; the CBN needs to forget about it please.”
A lawyer, Nkem Oboko, said: “It’s a welcome development from the government as this will help curb the amount of money in circulation and cut down on inflation drastically. The ‘stocking and stacking’ of naira notes by politicians and elite will be contained.”
Jerry Okonji said: “It’s a great idea. With time, it will inject considerable level of integrity in financial transactions.”
Patience Ikpeme described the policy as “a welcome development. This will help so many business people embrace the idea of mobile banking and this will to an extent reduce theft because nobody will be able to carry cash amount of cash around and criminal activities will easily be traced”.
Mrs. Olasimbo Abimbola on her part said “though many may think it’s a good idea, but to poor masses it is not a good idea at all. Let’s start from the petty trader that does daily retail sales (fish, tomatoes, yam, et al) as an individual she needs like 200k cash daily to purchase her goods… How is she going to cope? The present situation in Nigeria does not permit this”.
Ada Nwosu, another lawyer, who also operates a thriving Point of Sale (PoS) business in Abuja told The Nation that “the cash withdrawal limit policy would bring nothing but more hardship on Nigerians and also have negative effects on the already bad economy due to the fact that the proper structure has not been put in place, take for instance, the constant network glitches is a huge challenge with the present situation how much more with this new policy.
“In my line of business, being the CEO of a major PoS office, cash being transferred most often than not never gets to their beneficiaries, it is either on hold or it is reversed to the sender or takes hours/days before the beneficiary gets value, now what happens in an emergency (perhaps in a life and death situation) and money is transferred and the hospital that is waiting to get a confirmation before commencing treatment but does not get value due to network glitches and the patience dies? That is on one part
“On the other part, a lot of villages still do not have good or no network at all despite MTN adverts that says *Anywhere you Go*, and some of these villages are hours away from the closest bank hence, the advent of PoS.
“Some POS are located in the middle of nowhere, how can they render their services with the new policy? What about the rural women and men who do petty trading where normal telephone conversation is almost impossible due to bad network?
“And finally, the economy is so bad and with the prices of things so expensive, N200,000 daily limit is murder.”
Other analysts said despite the many hurdles the policy will create for businesses, and the risks associated with e-payment use, the policy also comes with some benefits to the naira and curbing inflation.
Pascal Okorie, a Lagos-based PoS operator, however, said the policy threatens his businesses and job creation in general and have called on the CBN to rethink the policy.
He predicted business closure for many PoS operators and job losses across the country from the policy fallout. He said many small businesses will witness rise in cost of operation and outright business losses due to the policy.

By Nduka Chiejina & Collins Nweze

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