Authorities have tried to curb counterfeiting and discourage ransom payments to kidnappers who demand cash.
Nigeria’s central bank has imposed restrictions on weekly cash withdrawals to limit the use of cash in an apparent effort to curb counterfeiting and discourage ransom payments to kidnappers.
Under a new policy announced late Tuesday, the Central Bank of Nigeria (CBN) said weekly cash withdrawals for individuals had been reduced from 2.5 million naira ($5,638) to 100,000 Nigerian naira ($225).
A majority of Nigerians do not have a bank account and use informal markets where cash is preferred. This move is designed to get more people into the banking system and will take effect on January 9, the CBN said.
“The maximum cash withdrawal per week via ATM is 100,000 naira, with a maximum of 20,000 naira ($45) cash withdrawal per day,” he said.
Only denominations of 200 naira and less will be loaded into ATMs, it said.
For businesses, the weekly limit has been reduced to 500,000 naira ($1,128) from the current daily limit of three million naira ($6,766).
“Withdrawals above these limits incur processing fees of five percent and ten percent, respectively,” the CBN said.
But under compelling circumstances, individuals and companies could withdraw up to five million naira ($11,277) and 10 million naira ($22,553) once a month, it added.
The central bank warned commercial lenders against violating the new cash limits, which it said were in line with its policy of promoting cashless transactions.
The bank has expressed concerns in the past about counterfeiting, the amount of money outside the banking system, and massive ransom payments to kidnappers and bandits.
Last month, Nigeria launched newly designed notes, another move the central bank said would help curb inflation and money laundering.
More than 80 percent of the 3.2 trillion naira ($7.2 billion) in circulation in Nigeria is outside commercial bank vaults and in private hands, CBN Governor Godwin Emefiele said when he presented the new banknotes. revealed.
“The currency redesign will also help in the fight against corruption as the exercise will rein in the higher denominations used for corruption and the movement of such funds from the banking system can be easily tracked,” he explained at the time .
The new banknotes – denominations of 200, 500 and 1,000 naira – will come into use on December 15, but Nigerians have until January 31 to return old banknotes when they are no longer legal tender.