Central Bank of Nigeria to limit cash withdrawals

[franky1]

N500,000 for corporate organizations is very small it is only about $1,125

dont think of it as a US amount.
that $1135 represents 16 months of minimum wage

if you were to think of it in american terms where in america $1.6k is 1 month min wage its saying in america a business can withdraw from a bank cashier counter $25k before paying fee(16 months of us minimum wage)

businesses can withdraw more.. at a fee. but an american business needing $25k a day cash to hand is not something businesses need to take out. usually businesses are depositing cash from customers. not taking out $25k a day.

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[Zaguru12]

Finally the government is welcoming the idea of cashless policy. With some importants of these actions already stated my most important aspect the value the Naira will gain against other exchange currencies. In a country already filled with corrupt people and kidnap in rampant, huge transactions could easily be traced.

Although some careless or illiterate citizens might results into hoarding this cash thereby resulting into black sale of cash outside the banks. Hoarding of cash could also lead some citizens to been robbed

What the government needs to do to make it effectively work is to sanitize illiterate business people. To work on the network problem often encounter by the banks. To order increase of transfer rate using the USSD code since not every citizen could have access to the bank mobile app all the time.

Lastly the government should look Into reducing the single cash to 200 naira or atmost 500 naira. Therefore scraping out the 1000 naira note, this will aid the return of lower notes and coins

[Dunamisx]

Am in support of any means adopted to limit the extent to how people make abuse of money, this will work in our favour regardless of class as long as the they will not sidelines the public to make it work in their favour for those in political powers, he law must be abiding by everyone regardless of class and this issues of cash availability has to be minimized to the least in other to curb those in abuse of it, it's also a pity that some individuals will store cash in bulkiness after they have looted the government and keep in their disposal for any papetrate of evil.

[jrrsparkles]

Implementing the cashless monetary system will really boost the growth of their economy?

Even some developed countries tried this and not yet succeed because the cons are more, like it will entire destroy the small scale business who contribute to the developing nations more than the corporates so the government has to implement what they actually need not what other countries tried to do.

[Frankolala]

This policy will not help Nigeria and its citizens because politicians will keep on stealing and hoarding them in different places such as their houses or even caskets since they will want to always be with cash. The government is bringing more hardship to the poor,in Nigeria there are SMEs whose business worth is not upto $10, how will these people coupe with cashless policy.

The aged illetrate people will find it frustrating to adapt to this policy and might end up been scammed. They are looking for a way to control the citizens not to go against their government, so that they can do whatever they  like. If they want to boost the country's economy let them go back to many of Nigeria natural resources that they abandoned because of crude oil and start working on them to export. These will great employment for youths in the country and help the economy.

Nigeria is so messed up that they have  refinery that is not in good shape,instead of them to use some funds to work it and start refining their crude oil themselves to make more money from its by-products,they will take their crude to another country for refining which will cost so much and after refining they bring back only PMS,diesel and kerosene and selling the rest without the citizens knowledge,making life worst and miserable for their citizens.

[aysg76]

And if you do that a few times, I bet you get questions.

They surely will ask to provide some documents in order to compile with the self made policies and regulations to put restrictions on the customers.You can increase limits but as you know you have to ask them with full disclosure so basically supervision on you.

Even though fiat money is pretty much a scam by design, they still don't want to you have "your" money!
Let's face it:

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Although you earn money and it's termed as your money but if we look the other way around then nothing is yours and the government and central chain of authorisation has the real power as they can make it illegal or restrict you from withdrawing your funds also so it's their funds just with you.

Henry Ford has made a valid statement but the fact is government won't allow people to realise it as they are living in dilemma of this scammy fiat currency.

[jaberwock]

  - Regardless of the limits they implement when it comes to withdrawal from the central banks, there is nothing the citizens can do about it. Now, if most Nigerians will be affected by these rules, I think the only simple solution is for them not to use bank accounts or not to make deposits in their accounts so that the banks will also feel the negative effects of this. in their industry.

Because for me, it doesn't seem like it helps the citizens in their country to be honest, but still, whatever their reason is, in my opinion, something is wrong.

Limiting withdrawals are still fine but when these things occur, people may start to worry. You know what happened to others, they also start limiting their service until one day, they just stop all the withdrawals. We only found out later on that the company is already bankrupt. Your advice there is right. People shouldn't deposit anymore but they will just withdraw all their money on that bank.

These people then should try to learn bitcoin and put their money there instead because no one would limit them there or freeze their accounts. Banks are not there to help but they are there to control people's money. People should start realizing this as soon as possible.

[so98nn]

With economical point of view this is amazing step taken by Nigerian government. The currency conversions should be taken into consideration. Checkout @franky math which tells the actual story behind the scenes. The amount of cash that’s being noted in the bill is optimum for both individual and businesses considering the fact that it is well above the minimum wages and also required daily amount to live in the Nigeria. For us as foreigner it might look like assault but it’s not!! The cashless system will bring power to the economy. However, they must educate everyone to use and adopt it smoothly.

[franky1]

With economical point of view this is amazing step taken by Nigerian government. The currency conversions should be taken into consideration. Checkout @franky math which tells the actual story behind the scenes. The amount of cash that’s being noted in the bill is optimum for both individual and businesses considering the fact that it is well above the minimum wages and also required daily amount to live in the Nigeria. For us as foreigner it might look like assault but it’s not!! The cashless system will bring power to the economy. However, they must educate everyone to use and adopt it smoothly.

its not a harm on average people of africa. its more of a 5%-10% fee on the rich/affluent if they try a bank run

even china's CBDC dont care about average joe income earner withdrawing/spending. the banks only KYC and monitor the richer wallets which they report to authorities like tax offices

CBDC and countries are chasing after the rich tax dodgers
as its not cost effective to chase a guy for 10% on week min wage as it probably costs a tax office more then 2 months of min wage to administer any tax chasing via courts, sheriffs, bailiffs and auctions combined

[Queentoshi]

How the policy would impact the economy and more importantly the citizens would be seen next month.

The first few months will be rough definitely since this policy seems to be something sudden. People will find it difficult to adjust to but will finally be okay if the policy stays. Many SME's will shut down for sure. I do not have any professional knowledge in economics to know the extent this can be beneficial to their economy, but it surely has some benefits that have been considered by the professionals before making this new policy. Some other countries with their currency suffering will be observing to see if they can copy and implement this policy if it serves the intended purpose for the Nigerian economy.

[kryptqnick]

N100,000 is around $225, and the limit isn't even per transaction or per day, but per week. This is a tiny amount, a very harsh policy for cash-reliant people. Imposing fees for higher amounts will discourage people from using cash, but is Nigeria even cashless enough for people to be able to get by without cash outside big cities? If it is, then it might be alright. But I fear that it isn't, and people will basically be forced to ration withdrawals and pay extra fees just to get by... Unfortunately, I couldn't find research on this matter that would explain which things are attainable without cash in Nigeria and how well-adopted card payments are in rural areas especially.

[Iroh]

This move might just be considered politically motivated by some. The redesigning of the currency notes obviously at a time close to the country’s general election could as well be considered politically motivated as well. But it has its uses as well.
This new move by the central bank to limit cash withdrawals would certainly come as a surprise to its citizens as most citizens and small businesses  probably utilize cash payments more often and this would somewhat be a hindrance to businesses as well as funds for personal uses.
This could also be a move to minimize the amount of cash in circulation and further to curb inflation in the country.

[Rengga Jati]

The central bank of Nigeria is changing up the entire system to try to boost the economy and the dwindling naira.

This is new enough that they limit the withdrawal around $45 Daily or $225 weekly from the ATM. And this amont is different for business. And they must pay around 5% and 10% to make withdrawal above the limits. Wow, this is complicated enough.
In my country, we also have limits fr withdrawing money from ATM, but the limit is high enough so that we cans till use it. And we also are abe towitdhraw from the bank directly with higher amount.

Reading thier purpose is to change the Nigerian habit tothe diital paymenet. But, what I read here is:

A majority of Nigerians have no bank accounts and use informal markets where cash is preferred.

So, the question is: Can the Nigerian change thie rhabit to the new rule? Are they ready for the changing? For, the rules willbe implemented in January.

[Fortify]

The Central Bank of Nigeria (CBN) has pegged maximum over the counter (OTC) cash withdrawal per week for individuals at N100,000 and N500,000 for corporate organisations.

...
The circular read: “Further to the launch of the redesigned Naira notes by the President of the Federal Republic of Nigeria, on Wednesday, November 23, 2022 and in line with the Cashless policy of the CBN, all deposit money banks (DMBs) and other financial institutions (OFls) are hereby directed to note and comply with the following:

"The maximum cash withdrawal over the counter (OTC) by individuals and corporate organizations per week shall henceforth be N100,000 and N500,OOO respectively. Withdrawals above these limits shall attract processing fees of 5% and 10%, respectively.
“Third party cheques above N50,OOO shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.”

...

The circular further stated that, the maximum cash withdrawal per week via Automated Teller Machine (ATM) shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.”

Also “only denominations of N200 and below shall be loaded into the ATMs.”

The maximum cash withdrawal via point of sale (POS) terminal shall be N20,000 daily, the circular further stated.

The circular further stated that in “compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed and for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees in (I) above, in addition to enhanced due diligence and further information requirements.”

The central bank of Nigeria is changing up the entire system to try to boost the economy and the dwindling naira.
I personally do not fancy the idea of limiting how much cash withdrawals one can make within certain periods of time and putting a low cap on that.
This would adversely affect SMEs around the country and while it would push more people to exchange digitally through cashless means, it would have lots of negative sides

How the policy would impact the economy and more importantly the citizens would be seen next month.

It would be interesting to know the underlying reason for such a seemingly drastic action because capital controls are the sign of a very desperate government and economic situation in any country. Is it connected with some plan to maybe change the notes of the country or are they actually running of of the notes themselves, wanting to push more transactions through electronic systems instead? If it's a drive to move more of the economy online and away from paper/coins you could sort of get behind it, because in the long run it will be more efficient. In reality it will not affect many low level workers who might never reach these amounts if they're high.

[franky1]

It would be interesting to know the underlying reason for such a seemingly drastic action because capital controls are the sign of a very desperate government and economic situation in any country.

many countries have an issue with big business doing huge cash-outs. driving to an airport leaving their lambos in the airport parking lot and flying out of the country

many businesses love to come into a country. get quick profit in some malicious way and escape with bundles of cash that cant be traced electronically..

its that simple
if they can atleast get a 5%-10% tax off those cash0and0run attempts. its less of a hit for a government

[8rch7]

I have converted with limit cash withdrawing at Central Bank of Nigeria about 10,000,000 naira and have valued about $22,575. Its seems small amount limited withdrawal for central bank, actually if small bank could acceptable with limit withdrawing until 10,000,000 naira but seems problem when Central Bank of Nigeria have regulation about withdrawing limit.

There seems to be political interference in limiting withdrawals at the Central Bank of Nigeria, it could be that right now there is a financial crisis and the Bank does not have a large amount so it makes a policy to limit withdrawals.

based on 1 Nigerian Naira equals
0.0023 United

[Alpha Marine]

Lastly the government should look Into reducing the single cash to 200 naira or atmost 500 naira. Therefore scraping out the 1000 naira note, this will aid the return of lower notes and coins

I totally agree with this. 200 naira should be the highest currency note. It will give the currency more value but i doubt they'll do that.

[Upgrade00]

so its basically saying ATM/retailer cashbask allows 3 weeks salary withdraw and personal bank account bank teller allows ~ 4 month salary withdraw

You can't simplify to the figures based on the minimum wage of the country, when a large amount of people are unemployed and majority are self employed.
For someone running a business which requires case inflow and output, a seller of clothes for example, they would need much more than their wage or profit to run the business (transport themselves, purchase the clothes, etc). Most of this transactions occur through cash and soon they would be limited to how much of it they can lay their hands on.

Am in support of any means adopted to limit the extent to how people make abuse of money,

It is the elite class who have the liberty to hoard cash and you can be rest assured they would not be affected by policies like this in a highly corrupt nation.
The main goal is to increase taxations on transactions and also force SMEs to use cashless means, which will give the government an idea of how much cash flow the company registers and how to tax them.

Lastly the government should look Into reducing the single cash to 200 naira or atmost 500 naira. Therefore scraping out the 1000 naira note, this will aid the return of lower notes and coins

I totally agree with this. 200 naira should be the highest currency note. It will give the currency more value but i doubt they'll do that.

Currencies do not simply gain value by reducing the maximum currency notes.
The value of a currency is tied heavily to the economy of the country and the trading power of that currency in international relations. Until both issues are decisively handled, the naira would continue to dwindle.

[Gyfts]

N100,000 is around $225, and the limit isn't even per transaction or per day, but per week. This is a tiny amount, a very harsh policy for cash-reliant people. Imposing fees for higher amounts will discourage people from using cash, but is Nigeria even cashless enough for people to be able to get by without cash outside big cities? If it is, then it might be alright. But I fear that it isn't, and people will basically be forced to ration withdrawals and pay extra fees just to get by... Unfortunately, I couldn't find research on this matter that would explain which things are attainable without cash in Nigeria and how well-adopted card payments are in rural areas especially.

There shouldn't be any limit. 225 USD is a large volume of money relative to median income earners in Nigeria. You can't think of 225 USD from the perspective of someone in a developed country.

People that aren't cashless in Nigeria can probably get by within the limits of the withdrawal limit, but that isn't what the primary issue is. This sort of story isn't new at all. Government can easily step in and limit cash withdrawals if they want to, or freeze people's accounts/implement spending limits.

The money that exists in these bank accounts aren't actually yours, they're the governments.

[Dunamisx]

It is the elite class who have the liberty to hoard cash and you can be rest assured they would not be affected by policies like this in a highly corrupt nation.

So are we not doomed into the hands of these our so called leaders, those who make the law but the law does not work against them, i think then we are all deceiving ourselves knowing that this is the reality of what is in stake and yet unable to voice out against them, isn't this a political era of second slavery colony in which this time is coming from the blacks to themselves and not from the whites.

The main goal is to increase taxations on transactions and also force SMEs to use cashless means, which will give the government an idea of how much cash flow the company registers and how to tax them.

This same wrong approach they have been using on fiat which has made people soughted after for bitcoin as a rescue can only be effective where altcoins and centralized exchanges are in function and not within the bitcoin network.