In an apparent effort to reduce cash use and deter ransom payments to kidnappers, Nigeria’s central bank has placed restrictions on weekly cash withdrawals.
As per the Central Bank of Nigeria, weekly cash withdrawals had been reduced from 2.5 million Nigerian naira (USD 5,638) to 100,000 naira (USD 225).
The majority of Nigerians use unofficial markets where cash is preferred and have no bank accounts. The Central Bank of Nigeria announced that this action, which aims to increase public access to banking, will go into effect on January 9.
“The maximum cash withdrawal per week via automated teller machine shall be 100,000 naira subject to a maximum of 20,000 naira (USD 45) cash withdrawal per day,” it said.
It stated that only notes with a value of 200 naira or less would be loaded into ATMs.
The daily limit for enterprises has been reduced from three million naira (USD 6,766) to 500,000 naira (USD 1,128) each week.
“Withdrawals above these limits shall attract processing fees of 5% and 10%, respectively,” the Central Bank of Nigeria said.
However, Central Bank of Nigeria noted, under exceptional circumstances, both individuals and enterprises could withdraw up to five million naira (USD 11,277) and ten million naira (USD 22,553) per month, respectively.
The new cash restrictions, which the Central Bank of Nigeria stated were in keeping with its strategy to encourage cashless transactions.
The bank has previously voiced worries about currency forgery, the amount of money that is not inside the banking system and significant ransom payments to criminals.
Nigeria introduced new currency notes this month, another move the central bank said would help curb inflation and money laundering.
According to Central Bank of Nigeria Governor Godwin Emefiele, more than 80% of the 3.2 trillion naira (USD 7.2 billion) in circulation in Nigeria is not kept in commercial banks’ vaults but rather in private hands.
“The currency redesign will also assist in the fight against corruption as the exercise will rein in the higher denomination used for corruption and the movement of such funds from the banking system could be tracked easily,” Godwin Emefiele explained.