Less than 24 hours before the governor’s appearance before the House of Representatives, the Central Bank of Nigeria reversed its controversial policy on cash withdrawal setting limits on amounts individuals and corporate organisations can withdraw from the bank daily and weekly.

In what appears a pre-emptive act and a softening of ground against verbal fireworks from the legislators, the CBN in a letter titled Re: Naira Redesign Policy – Revised Cash withdrawal Limits addressed to all Deposit Money Banks (DMBS) and other financial institutions, primary mortgage banks, Microfinance banks and mobile money operators, the Apex bank said the maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall now be N500,000.00 and N5,000,000.00 respectively.

The CBN said it was compelled to reverse the policy based on feedback received from stakeholders. The House of Representatives had earlier passed a resolution calling on the CBN to reverse the policy. In a statement signed by Haruna B. Mustafa, Director of Banking Supervision, the CBN said inter alia:

“In compelling circumstances policy. where cash withdrawal above the limits is required for legitimate purposes, such requests shall be subject to a processing fee of three per cent and five per cent for individuals and corporate organisations, respectively.”

Furthermore, the financial institutions shall obtain additional information form their customers, including valid means of identification of the payee; Bank verification number, Tax identification number and approval in writing by the MD/CEO of the financial institution authorizing the withdrawal.

In the case of third-party cheques above N100,000, the CBN directed that it cannot be eligible for payment over the counter, while the extant limit of N10 million on clearing cheques still subsists.

“Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the Banking Supervision, Other Financial Institutions Supervision and Payments System Management Departments as applicable,” the CBN said.

The CBN urged bank customers to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.

CBN acknowledged that “bank and Mobile Money Agents are important participants in the financial system, enabling access to financial services in underserved and rural communities”.

“They will continue to perform these strategic functions in line with existing regulations governing their activities,” it said.

The CBN said it recognises “the vital role that cash plays in supporting underserved and rural communities and will ensure an inclusive approach as it implements the transition to a more cashless society”.

The CBN further warned that aiding and abetting the circumvention of this policy will attract severe sanctions. The new directive takes effect nationwide from January 9.