The Central Bank of Nigeria (CBN) has made a significant announcement regarding cash withdrawal limits, impacting both individuals and businesses. The new policy, effective January 1, 2026, imposes a weekly cash withdrawal limit of N500,000 for individuals across various channels, including ATMs, POS terminals, and over-the-counter transactions. Corporate account holders, however, are granted a higher limit of N5 million per week. This move aims to address the rising costs of cash management, enhance security, and combat money laundering risks.
Dr. Rita I. Sike, Director of the Financial Policy & Regulation Department at the CBN, emphasized the policy's benefits, stating that it would streamline cash management and fortify security measures. The policy also clarifies that there are no restrictions on foreign currency withdrawals, but it does apply to local currency (Naira) withdrawals using foreign cards. This distinction is crucial for customers to understand.
One of the key features of this policy is the fee structure for excess withdrawals. The CBN explains that fees are calculated as a percentage of the amount exceeding the prescribed limit. For instance, if an individual withdraws N700,000 in a week, they exceed the limit by N200,000, and with a 3% processing fee, they would be charged N6,000. This transparent fee system ensures customers are well-informed about their financial obligations.
Banks and financial institutions are tasked with implementing these policies by setting limits, monitoring compliance, and collecting fees for withdrawals above the set limits. The CBN emphasizes that these policies apply to all banks, including commercial, merchant, non-interest, payment service, primary mortgage, and microfinance banks. However, the CBN reserves the right to periodically review and adjust the policies to align with economic changes.
The CBN also addressed several FAQs, providing clarity on various aspects of the policy. Excess withdrawal fees are non-refundable, and customers are not required to provide documentation for transactions within the prescribed limits. Cheque encashment is subject to the same daily and weekly withdrawal limits, and third-party cheques have a N100,000 cash withdrawal limit at the counter. Corporate cheques, on the other hand, can draw up to N5 million weekly in cash.
Furthermore, the CBN outlined banks' reporting obligations, which include cash withdrawal transactions exceeding limits, cash deposits, and processing fees. Banks are also required to maintain detailed logs for audit and compliance purposes. It's important to note that transactions involving government accounts are exempt from these limits, while religious organizations are not. Microfinance banks and primary mortgage banks have specific exemptions for operational cash sourcing, but their customers remain subject to the prescribed limits.
In summary, the CBN's new cash withdrawal limit policy introduces a structured approach to cash management, security, and compliance. While it may present challenges for some, the policy aims to strike a balance between accessibility and financial security, ensuring a more controlled and transparent environment for all stakeholders.
