Daily Limit of N100,000 Introduced
The Central Bank of Nigeria (CBN) has announced a significant policy shift, setting a daily cash withdrawal limit of N100,000 per customer for transactions conducted via point-of-sale (PoS) terminals. The weekly withdrawal cap has also been pegged at N500,000. This move, outlined in a circular titled “Cash-out limits for agent banking transactions,” underscores the apex bank’s ongoing push toward a cashless economy and its commitment to curbing fraudulent financial activities.
Focus on Cashless Economy
According to the CBN, this policy aims to reduce the reliance on cash transactions across the country while fostering financial inclusivity through digital channels. The directive applies to all deposit money banks (DMBs), microfinance institutions, mobile money operators, and licensed banking agents. A spokesperson for the CBN explained, “The cashless initiative is pivotal in enhancing transparency in financial dealings and reducing systemic risks posed by heavy cash flows in the economy.”
Stricter Compliance Measures for Agents
The circular emphasizes that banking agents must comply with the new rules, which also impose a cumulative daily transaction limit of N1,200,000 for each agent. Additionally, all agent banking activities are to be conducted strictly via float accounts linked to their principals. Banks will be held accountable for their agents’ adherence to these regulations, with the CBN conducting random inspections and configuration checks to ensure compliance.
Fraud Prevention at the Forefront
A critical aspect of the policy is its focus on fraud prevention. By mandating the submission of daily transaction data to the Nigeria Inter-Bank Settlement System (NIBSS), the CBN aims to create a robust monitoring system that detects unauthorized or suspicious transactions. The use of Bank Verification Numbers (BVNs) to track and control cash withdrawals further enhances oversight, reducing the potential for financial crimes.
Penalties for Non-Compliance
The CBN has warned that breaches of the new directive will attract severe penalties. These range from monetary fines to administrative sanctions for banks and agents found violating the limits. The enforcement measures highlight the CBN’s zero-tolerance stance on non-compliance as it seeks to instill discipline in the financial system.
Public Reaction and Economic Implications
While some Nigerians have welcomed the policy as a step toward modernizing the economy, others have raised concerns about its potential impact on businesses reliant on cash transactions. Experts, however, argue that the long-term benefits of a cashless economy outweigh the temporary disruptions. Financial analyst Bola Adegbite noted, “Though the limits may seem restrictive, they are necessary for fostering a digital-first economy and addressing issues like money laundering and corruption.”
The CBN’s new cash withdrawal limits mark a decisive step in Nigeria’s journey toward financial modernization. As the policy takes effect, its success will depend on the seamless adoption of digital payment solutions and the cooperation of stakeholders across the financial ecosystem.
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