With just a month left before the regulatory directives of the Central Bank of Nigeria’s Revised Cash Withdrawal Limits takes effect nationwide, Nigerians have vocalized varied reactions about the effects of the policy.
The CBN said the policy, which is a follow-up of the Naira Redesign Policy, will take effect from January 9, 2023, in a letter to all Deposit Money Banks and Other Financial Institutions like Payment Service Banks, Primary Mortgage Banks, and Microfinance Banks.
The letter, signed by the Director of Banking Supervision, Haruna B. Mustafa, on the 6th of December, states that an individual cannot withdraw more than N20,000 cash per day or N100,000 per week over the counter or at Automated Teller Machines or point of sale terminals.
However, where an individual’s withdrawal goes above the daily or weekly limit, it will attract a processing fee of 5%. In addition to enhanced due diligence and further information requirements, the fee will also be charged if there is a compelling circumstance where cash withdrawals above the prescribed limits are required for legitimate purposes. In such a case, the limit is N5,000,000 once a month.
For corporate organizations, the cash withdrawal limit will be N500,000 per week with a 10% processing fee if the amount is exceeded. Also required is enhanced due diligence and further information requirements in compelling circumstances where cash withdrawals above the prescribed limits are required for legitimate purposes. In such a case, the limit will be at most N10,000,000 once a month.
After the January 9 deadline, ATMs will only release denominations that are N200 and below, and third-party cheques that are more than N50,000 will no longer be paid over the counter. However, extant limits of N10,000,000 on clearing cheques still subsist.
The apex bank also urged deposit banks and other financial institutions to encourage customers to use alternative channels like internet banking, mobile banking apps, USSD, cards/POS terminals, or eNaira, to conduct banking transactions. The CBN further cautioned that aiding and abetting the circumvention of the policy would attract severe sanctions.
The feedback from Nigerians has, however, been diverse. At the end of yesterday’s plenary session at the Senate, the Senate Committee on Banking, Insurance, and Other Financial Institutions is to screen the nominations of Mrs. Aishah Ahmad and Mr. Edward Lametek Adamu as deputy governors of CBN.
Following the referral, the Senate President, Ahmad Lawan, said the CBN must provide more details on the policy, and they would exhaustively debate the matter on Tuesday.
“I want us to be well guided and informed. If we want to be a cashless society, we should take time to be a cashless society and not jump on it at once, or else most Nigerians will be out of business. We need to use the opportunity of the screening to be better informed on the policy,” Lawan said.
Meanwhile, Toheeb Azeez, an accountant for a financial institution in Ogun State, said, “From my point of view, the CBN wants to enforce the cashless policy by reducing cash handling as much as possible. The implication is that when the new N1,000, N500 and N200 notes are in circulation, don’t pay cash for anything except you don’t have a choice. Like paying for bus fares or buying items in traffic. Use your card or transfer if you must pay for anything above N1,000. , simply transfer it or use your card.
“Difficult times are ahead as it will be hard for some people to transition into this system. Educate your friends and family, as this may take a toll on them. Start reactivating your mobile financial apps and USSD. How you carry out transactions next year will depend on these cashless platforms,” he said
Ekaete Jude, a secretary in Uyo, said she doesn’t think the policy will change anything. “One can withdraw one million Naira in cash by sending N100,000 to different people. If people want to exceed the limit without a penalty, they will.”
On the other hand, Chris Chinedu, a fabric merchant in Lagos, lauded the CBN’s initiative but said it might be futile. “It's a good policy, but sadly, there’s always a massive loophole in Nigeria’s policies or times when the government turns a blind eye because certain tribes are untouchable.
“The same way that there are no US dollars at the CBN and commercial banks, but Aboki can get you $10,000 in a few hours, and the same way yahoo boys cash their loot, that’s the same way politicians and criminals will find a way around the system. I am sure they are seeing the notice and are part of the reasons for the policy. They can have accomplices in banks and the CBN if care is not taken.”
A teacher at Rivers State, Mrs. Joy Obi, said the policy could be counterproductive. “It won’t stop politicians from rigging, and vote buying will happen thanks to this policy. I received a call from Benin asking for my account number to transfer money. It dawned that a political party wanted to buy my vote, and I ended the call,” she said.
When asked if she thinks Nigeria is ready for the technological implication of the policy, Temitope Ade, a tech expert in Arepo, said, “We have been on this route since the lockdown. I presently don’t buy foodstuff from sellers who don’t take transfers. My fish and chicken seller, the food items woman, and even the restaurant I eat at all take transfers. I don’t think the transition will be difficult. We are already on the part of the transformation.
Also, Ms. Loveth Peters, a restaurant operator in Mowe, said she has no issues with the new policy. “Sometime last year, I had to travel and instructed my staff not to collect transfers because I didn’t want to be disturbed, and I lost customers because of that. Customers mostly patronize those who accept transfers or have POS terminals even for cooked food.”
As regards N200 being the highest denomination ATMs can pay, Terna Jonathan, a driver in Lagos State, said, “It could be an attempt at curbing inflation and increasing the value and prominence of lower denominations of the Naira.”
