Nigeria sets cash withdrawal limits

Nigeria sets cash withdrawal limits

Nigeria's central bank has set out a range of policies designed to wean the country off expensive and risky cash in favour of electronic payment methods.

In a circular to industry players, the Central Bank of Nigeria says the dominance of paper money has big cash management, security and money laundering implications.

To encourage a move to electronic money, Nigerians will face a daily cumulative limit of N150,000 for cash withdrawals and deposits, facing fines if they go over this amount. Corporations will have to stick to a limit of N1000,000.

Meanwhile, people will not be able to cash third party cheques above N150,000 over the counter, with customers having to receive the money though a clearing house.

The policy will apply to people in Lagos state, FCT, Port Harcourt, Kano and Aba from next June, with a roll out across the rest of the country to follow.

In addition, the bank is trying to promote interoperability of local currency POS transactions by insisting that, from next June "no card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria".

Any player that contravenes the policy faces a minimum one month suspension for a first offence and could have their license withdrawn for repeats.

Comments: (1)

A Finextra member
A Finextra member 05 May, 2011, 15:43Be the first to give this comment the thumbs up 0 likes

People will not be able to cash third party cheques or cash above N150,000 over the counter

WOW – This is not a big sum of money, sitting just under USD 1000

This is sweepingly too strict too quickly and is likely to encourage all sorts of unwanted shadow banking practices.