Revised Withdrawal Policy to Take Effect January 1, 2026
The Central Bank of Nigeria (CBN) has announced a new policy introducing an extra charge on weekly cumulative cash withdrawals for both individuals and corporate entities that exceed set limits. This revised rule is scheduled to become effective on January 1, 2026.
According to a circular issued on Tuesday and signed by Dr. Rita I. Sike, Director of the Financial Policy & Regulation Department, the CBN stated that these cash-related policies are designed to moderate the increasing cost associated with cash management. The regulator indicated that previous policies were introduced in response to various economic factors.
Previously, the CBN had implemented cash withdrawal and deposit limit policies to address security concerns and mitigate the potential for money laundering, which is often associated with the economy's significant reliance on cash. These policies also aimed to reduce overall cash usage and accelerate the adoption of alternative payment methods, particularly electronic payment channels.
As time has progressed and in alignment with current market operations, the CBN is revising its cash-related policies. The circular noted, "The effluxion of time, the need has arisen to streamline the provisions of these policies to reflect present-day realities."
Details of the Revised Cash Withdrawal Rules
Under the new regulations, excess cash withdrawals exceeding N500,000 weekly for individuals and N5 million weekly for corporates will incur fees of 3% and 5% respectively. This fee structure will be shared between the CBN and the financial institutions, with 40% allocated to the CBN and 60% retained by the bank or financial institution processing the withdrawal.
Previously, the regulator did not have provisions for withdrawals exceeding these established limits. The introduction of these fees now allows Nigerians to withdraw funds beyond the specified thresholds, albeit with an additional charge.
It is important to note that the withdrawal limits on Automated Teller Machines (ATMs) remain unchanged. Individuals are still restricted to a daily withdrawal limit of N100,000 per customer, with a maximum weekly limit of N500,000.
Other Significant Policy Revisions
- •The special authorization that previously allowed individuals to withdraw up to N5 million and corporates up to N10 million once a month has been discontinued.
- •ATMs can now be loaded with all currency denominations. The over-the-counter encashment limit for third-party cheques remains at N100,000.
- •Deposit Money Banks are now mandated to submit monthly reports detailing cash withdrawals exceeding the specified limits, as well as cash deposit information, to the relevant supervisory departments.
- •The cumulative deposit limit and the associated fee for excess deposits have been discontinued. Banks are also required to establish separate accounts to hold the processing charges collected on cash withdrawals that exceed the set limits.
These revised policies are part of the CBN's broader reform initiatives across the Nigerian financial sector. They align with the bank's recent efforts to enhance transparency, accountability, and responsible operations within the financial system.
In a related development, a proposed guideline released on Monday by the CBN outlines a new framework for dealing with Authorised Push Payment (APP) fraud. Victims of such fraud will have up to 72 hours to report incidents, after which banks will be required to investigate and process refunds within a specified timeframe.
These policies are intended to support the CBN's mandate of fostering a sound financial system in Nigeria by addressing the growing incidence of Authorised Push Payment fraud.