Cash withdrawal limit reversal: Expert slams CBN

From Boniface Okoro, Umuahia

A former Commissioner for Finance in Abia State, Chief Richard Harrison, has carpeted the Central Bank of Nigeria (CBN) for succumbing to pressure by announcing upward review of the cash withdrawal limit policy which the apex bank introduced on December 6, 2022.

The professional banker who served as Commissioner for Finance during the administration of Governor Theodore Orji, in a brief statement, maintains that the move would encourage money laundering and corruption, adding that the CBN was only doing the bidding of politicians.

CBN had, on the December 6 policy initiative, pegged over-the-counter cash withdrawal limit for individuals at N100,000 and that of corporate organisations at N500,000.

The bank also reduced withdrawals at Automated Teller Machines (ATMs) and Point-of-Sale terminals to N20,000 per day.

But following a public outcry against the policy and interventions by the National Assembly, the CBN, through its latest circular on its plan to make Nigeria a cashless country, had to announce an increment of the maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations to N500,000 and N5 million, respectively.

The latest directive was contained in a circular issued by the CBN on Wednesday, December 21, 2022 and signed by the Director of Banking Supervision Department, Haruna Mustafa.

The policy, initially, had generated mixed reactions from Nigerians. While some said it would have a negative effect on small businesses, others applauded it as a strategic move towards boosting the cashless policy and reducing the amount of cash outside the banking system.

In the circular, the apex bank said it made the upward review based on feedback received from stakeholders.

The circular reads in part: “The Central Bank of Nigeria (CBN) hereby makes the following reviews: The maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000.00 and N5,000,000.00 respectively.

“In compelling circumstances where cash withdrawal above the limits in (1) is required for legitimate purposes, such requests shall be subject to a processing fee of 3 percent and 5 percent for individuals and corporate organisations, respectively.

“Further to (2) above, the financial institution shall obtain the following information from the customer, at the minimum, and upload same on the CBN portal created for the purpose: valid means of identification of the payee (national ID, international passport, or driver’s license), bank verification number (BVN) of the payee, tax identification number (TIN) of both the payee and the payer, and an approval in writing by the MD/CEO of the financial institution authorising the withdrawal.

“Third party cheques above N100,000 shall not be eligible for payment over-the-counter, while the extant limit of N10 million on clearing cheques still subsist.”

The CBN said monthly returns on cash withdrawal transactions above the specified limits should be rendered to the banking supervision department, other financial institutions supervision and payments system management departments.

“Compliance with extant AML/CFT regulations relating to KYC, ongoing customer due diligence and suspicious transaction reporting etc. is required in all circumstances.

“Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions,” the circular added.

CBN stressed that it recognises the vital role that cash plays in supporting underserved and rural communities and would ensure an inclusive approach as it implements the transition to a more cashless society.

“All banks and OFls are to note that aiding and abetting the circumvention of this policy will attract severe sanctions,” the apex bank warned, adding that “the above directives supersede that of December 6, 2022 and take effect nationwide from January 9, 2023.”

But Harrison reacted angrily to CBN’s upward review of the daily cash withdrawal limit, saying it would encourage financial malfeasance in the system.

“This decision simply made nonsense of currency redesign and reducing inflation through cashless society,” the former staff of defunct Halmark Bank said, querying “Why must anyone transact business in cash?”

Harrison who has been living abroad after resigning as Commissioner for Education in Abia State and has been residing abroad, submitted: “There’s always something to hide and to destroy transaction trails. If there is anything like Fake Naira, ask our Mint and Printing Company.  There’s absolutely no need for the policy reversal.” 

He further explained that the onus was on the beneficiary of a transaction to explain why money was transferred to him or her.

“If you want to pay me N100 million, transfer it to my account and I will take the responsibility to explain the source of the transaction. CBN is simply doing the bidding of politicians by its actions. We are simply encouraging Money Laundry and corruption,” he said.