N500,000 for corporate organisations, N100,000 for individualslN20,000 maximum daily ATM withdrawal
*It’ll put us out of business — Mobile money agents

LAGOS — The Central Bank of Nigeria (CBN) has restricted cash withdrawals from over-the-counter, Automated Teller Machines (ATMs) to N100, 000 and N500, 000 per week for individuals and corporate organizations, respectively.

The apex bank disclosed this yesterday in a circular to all deposit money banks (DMBs) and other financial institutions (OFIs), signed by the Director, Banking Supervision Department of CBN, Mr. Haruna Mustafa, adding that daily withdrawal from ATMs will now be N20,000 subject to N100,000 per week.

The CBN also directed DMBs and OFIs to load only N200 and lower denominations into their ATMs.

However, these positions were not acceptable to mobile money operators as well as the organised banks’ customers, who have now threatened to take steps to express their opposition to the new regulations.

The CBN circular had stated: “Further to the launch of the redesigned naira notes by President Muhammadu Buhari on Wednesday, November 23, 2022, and in line with the cashless policy of CBN, all deposit money banks and other financial institutions are hereby directed to note and comply with the following: the maximum cash withdrawal over the counter by individuals and corporate organizations per week shall henceforth be N100,000 and N500,000 respectively.

“Withdrawals above these limits shall attract processing fees of 5.0 per cent and 10 per cent, respectively; third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10 million on clearing cheques still subsist; 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.

“Only denominations of N200 and below shall be loaded into the ATMs; the maximum cash withdrawal via the point of sales terminals shall be N20,000 daily.
“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 million and N10 million 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.

“Further to (6) above, you are required to obtain the following information at the minimum and upload same on the CBN portal created for the purpose.”

Banks warned on devices that reject cards
Meanwhile, the apex bank also, in another circular yesterday, signed by the Director, Payments Systems Management Department, Mr. Musa Jimoh, warned banks and acquirers to desist from the practice of deploying devices that discriminate between payment cards during banking transactions.

The regulator noted that this practice was against the provisions of the Guidelines on operations of Electronic Payment Channels in Nigeria (June 2020).

It stated: “CBN has observed that a number of the acceptance devices deployed by banks discriminate between payment cards.

“For the avoidance of doubt, all certified payment acceptance devices deployed in Nigeria are required to accept all transactions arising from any card issued by any Nigerian bank.

“This circular serves as a reminder of the following provisions of the Guidelines on Operations of Electronic Payment Channels in Nigeria (June 2020): Section 2.4.1.3

“This serves as a notice to all banks and acquirers to desist from the practice of discrimination, as observed breaches will attract appropriate regulatory sanctions,” CBN stated.

“Meanwhile, the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has kicked against the CBN’s cash dispensing policy, sayin it will not fly, and protested that it will dampen business for mobile banking agents.
Commenting on the new policy, President of AMMBAN, Mr. Olojo Victor said: “They want to send us out of business. We are against this. It is counter-productive. It does not represent what the CBN initially stood for in terms of financial inclusion. This is not driving us forward.

“It is a punishment for an average Nigerian. A bag of rice is N48,000. That means if I want to go to the market I can’t take cash. How will I do the transaction?

“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitized. There is no alternative and you are taking out cash. You are running a cash-dominant economy as we speak.

“Cash still remains king whether we like it or not. Go to the average market we still have more cash transactions than PoS and suddenly you want to seal cash without bringing alternatives and education and sensitizing Nigerians on how the alternatives work. This will not fly. It is not suitable. It is a good idea but not at the right time.”

Good but implementation is difficult – BCAN

However, the President, Bank Customers Association of Nigeria, BCAN, Dr. Uju Ogubunka, commended the CBN on the policy.
He, however, noted that such policy cannot function in a country where most of its citizens are market women who cannot make use of electronic payment channels.

“What they are telling us is that we should use online banking more than we use cash. They are not stopping us from using the money in our accounts. What they are saying is that we should focus more on using electronic payments to do more of the transactions.
“But given the level of our people and even the use of mobile applications for banking transactions, it might be a big challenge. Like I was telling somebody earlier today if I want to buy vegetables in the market, how do I transact that business without cash. It will be very difficult. We don’t expect that we will be carrying phones to transfer money to market women.

There are areas you can apply electronic banking and there are areas you cannot apply it.”
Ogubunka also said that the banking sector does not have adequate infrastructure in place to back up the CBN’s policy and that such policy will dampen business this festive season.
He further warned against the possibility of rise in fraud through electronic payment channels and increase in failed bank transactions.
“This policy will result in reduced business patronage especially for those who may not be able to use mobile banking applications. Because of I have to buy things using cash and the cash is not available and there is nothing I can do about it, it will restrict me from buying or buy on credit, that is if you have sellers who will be magnanimous to do that for you these days. It is certainly going to dampen cash-related businesses.

“Until we are able to get the infrastructure that will be able to give us seamless transactions and things like that.

“Right now, the infrastructure we have is not as much as one would expect and that is why customers complain of failed transactions and all of that.

“ Also, many people have been complaining about failed transactions for instance when they do transfers and make payments online they end up saying those transactions didn’t get to the beneficiaries. I know these things because I have been to the banks myself to ask questions and customers als complained to the association. Quite a number of fraud, uncertainties, lack of trust we still have a lot of that in the system.

“If we have real infrastructure for these things, we won’t have problems. Until that is done, what the policy is telling us is that we cannot do business beyond that level in a week.”

CBN did not consult enough – MICRO ENTREPRENEURS GROUP

Also, the President of the Association of Micro Entrepreneurs of Nigeria, AMEN, Prince Saviour Iche, has expressed his reservations with the new cash policy, but, noted that what the CBN is trying to do is to make Nigerians adopt the cashless policy.

He, however, stated: ‘‘The problem we are having is that most of these policymakers do not consult the stakeholders in most of their policies. They don’t. The problem of this country is the wrong policies.

‘‘If the CBN governor has engaged the civil society group and the businessmen and women I believe that we would have been able to put heads together. For instance, a business friend of mine was telling me last week that he doesn’t do transfer, he believes in going to the bank to do all his transactions because he is afraid of losing his money. He is not an illiterate but a business person, who is trying to be careful. So, what happens to people, who do daily business?

“What CBN doesn’t understand is that people would be afraid to take their money to the bank, they would rather stock it at home to run their businesses. I believe the policy is for only withdrawals, but, if it is for transfer too or deposits, then there would be serious problems.

“Some market women who engage on daily business and carry cash around, they go to bank almost daily to safeguard their money, what happens.”