The Central Bank of Nigeria has imposed limits on weekly cash withdrawals in an attempt to curb fraud and deter ransom payments to kidnappers.
Under a new policy announced on Tuesday, the Central Bank of Nigeria (CBN) said weekly cash withdrawals for individuals had fallen from 2.5 million naira (US$5,638) to 100,000 Nigerian naira (US$225).
Most Nigerians are unbanked and use informal markets where cash is preferred. The central bank said the measure is aimed at attracting more people to the banking system and will come into effect on Jan. 9.
“The maximum cash withdrawal per week from ATMs is 100,000 naira, subject to a maximum withdrawal of 20,000 naira (US$45) per day,” it said.
It added that only denominations of 200 naira and less will be loaded at ATMs.
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For companies, the weekly limit has been reduced from the current three million naira (US$6,766) to 500,000 naira (US$1,128).
“Withdrawals that exceed these limits will incur processing fees of 5 percent and 10 percent, respectively,” the Central Bank of Nigeria said.
He added that in cases of force majeure, individuals and businesses can withdraw a maximum of five million naira (US$11,277) and 10 million naira (US$22,553) once a month, respectively.
The central bank has warned commercial lenders against violating the new cash limits, which they say are consistent with its policy of promoting cashless transactions.
In the past, the bank has raised concerns about counterfeiting, the supply of money outside the banking system, and paying huge ransoms to kidnappers and crooks.
Last month, Nigeria issued redesigned banknotes, another measure the central bank said would help curb inflation and money laundering.
More than 80% of Nigeria’s 3.2 trillion naira ($7.2 billion) in circulation
