Customers, Companies Panic As CBN Slashes Withdrawal Limits

 

Nigerians have reacted to the new policy by the Central Bank of Nigeria imposing cash withdrawal limits on individuals and organisations.

 

The policy will take effect from January 9, 2023.

 

According to a memo issued by the CBN to banks on Tuesday, individuals will only be able to withdraw N100,000 per week (from over-the-counter, point-of-sale machines or automated teller machines), while organisations can access N500,000 per week.

 

The memo signed by the CBN’s Director of Banking Supervision, Haruna Mustafa, directed banks to load only N200 and lower denominations into their ATMs.

 

This means Nigerians will only be able to withdraw N20,000 per day from ATMs when the directive becomes effective.

 

The memo read, “The maximum cash withdrawal over the counter by individuals and corporate organisations per week shall henceforth be N100,000 and N500,000 respectively. Withdrawals above these limits shall attract processing fees of 5 per and 10 per, respectively.

 

However, there is an exemption that allows up to N5m for individuals and N10m for corporate organisations once a month with certain requirements.

 

The CBN warned banks that any bank that would aid and abet the circumvention of this policy will attract severe sanctions.

 

Following the new directive, the National President, Association of Mobile Money and Bank Agents of Nigeria, Victor Olojo spoke to Punch.

 

He said that point-of-sale operators would plan to protest as the policy was targeted at killing their source of livelihood.

 

Olojo disclosed that the newly announced policy would have a negative impact on their business as it translated to the shutting down of PoS terminals.

 

 He said, “This news is just breaking and a lot of PoS agents are already complaining bitterly. Some are calling for protests as this policy, which limits PoS transactions to N20,000, sends them out of business. Hence they have to return to their villages.”

Speaking on the impact of the new policy on individuals and the economy, the president said it would be really tough as Nigeria was still a cash-dominant society.

 

He said, “Nigerians should brace up, as this is a challenge that CBN is putting out to Nigerians to embrace technology. However, the difficulty would be felt as we still have a lot of transactions done with cash, especially those that are below the pyramid such as the market women and men who are petty traders, because this in essence means that once a bag of rice or flour is to be bought, which is above N20,000, it has to be via e-banking. Looking at it, how many of these people are technology-savvy?

Olojo noted that his fears and concerns were that the policy was coming at a harsh period when the Nigerian economy was ill-prepared for it. He added that  there should be an adequate alternative before any process would be scrapped.

 

Also, a PoS operator, simply identified as Christian Onyema said, “The new CBN policy will affect our business because pegging daily transaction limit to N20,000 is not helpful for us. For instance, a customer who wanted to transact business came to withdraw N500,000 today, I made my gains and he was able to do his own business. This will no longer be possible by January when the policy takes effect. The economy will suffer and insecurity will rise too because some operators will definitely go out of jobs.”

 

Another operator who gave his name only as ‘Small’ said, “This will really affect PoS business, a situation where customers can’t withdraw more than N20,000 daily means those who withdraw more than that normally will be limited.”

 

The Deputy Managing Director of ABC Transport, Jude Nneji, however, lauded the project.

 

He said, “At least, it will limit some of these crimes. If somebody knows he can’t get cash from you, he won’t bother to attack you. If you also consider the cost of printing this money, you’ll want to use electronic means.”

When asked if this would not affect his transport business, he said, “No doubt, it’s going to encourage people to hoard funds but for people like us whose customers pay through electronic means, we don’t have a problem. However, we hope that government has good intentions too.”

The Chief Executive Officer, Rivers Link, Mr Obinna, said, “This will affect our business, some of us are businessmen and there may be things you want to buy that will be more than N20,000, and some of us may prefer cash, so it will surely affect businesses.”

  

The Lagos State Chairman of the Nigerian Association of Small and Medium Enterprise, Dr Adebayo Adams, said the policy would hit businesses, especially MSMEs.

 

  

The President of the Bank Customers Association of Nigeria,  Dr Uju Ogunbunka, said that the cashless policy’s intentions were understandable but the execution and timing were not right, stressing that these were areas where severe problems would emerge.

 

 

A former President of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, said that the CBN, in limiting withdrawals, was trying to reduce cash in circulation and drive financial inclusion, which was not a bad thing to do.

 

He said, “They are trying to limit cash in circulation so that people will have little cash. I think they are trying to drive financial inclusion with the policy.”

“With more money in banks, the banks can use the money for their financial intervention role in the economy,” he said,

 

He, however, urged the banks to ensure that Nigerians could trust their systems enough to keep their money there.

 

He noted the issue of people losing money in their bank accounts to cyber-attacks and fraudsters could discourage them from keeping money in banks.

 

Nzekwe urged the banks to address this issue and build more trust with Nigerians to drive financial inclusion and security in the country.