CBN’s guidelines for revised cash withdrawals

The Central Bank of Nigeria is the body saddled with the responsibility of monetary control and regulation in Nigeria. The CBN in October 2022, announced it would be redesigning the Naira to forestall counterfeiting and allow individuals to save money with banks rather than keeping monies privately. The CBN’s currency redesigning policy was greeted with mixed reactions from the general public, with fears that the change might cause a rush in the already over-stressed economy.

On November 27, 2022, the CBN revealed the redesigned Naira notes to the general public. This revelation saw millions of Nigerians deposit their old currency notes with commercial banks. 

Following the CBN’s Naira redesign announcement and cashless policy initiative, the CBN released the revised cash withdrawal limits guide to the general public on December 6th, 2022. This article looks at the provisions of the cash withdrawal limits guide and how they generally affect businesses in Nigeria.

The Cash Withdrawal Limits Guide

Through a letter dated December 6th, 2022, to all deposit money banks, financial institutions, payment service banks, primary mortgage banks, and microfinance banks, the CBN instructed that the provisions of the guide be followed strictly by all participants in the financial sector. We seek to identify each distinct provision and discuss them sufficiently.

1. Over-the-counter maximum cash withdrawals

The CBN’s Letter set a maximum amount that can be withdrawn by individuals and corporate bodies through the counter. Individuals can withdraw no greater than 100,000 Naira over the counter while corporate bodies can withdraw no more than 500,000 Naira. The maximum withdrawal relates to the total withdrawals for a week. 

This invariably means corporate bodies and individuals would not be allowed to withdraw over the counter for every week more than 500,000 Naira and 100,000 Naira respectively. The letter provides a processing fee of 5% for individual withdrawals and a 10% fee for corporate withdrawals exceeding the prescribed thresholds. 

2. Cheque limitations

Third-party cheques above 50,000 Naira can no longer be accepted for payment over the counter. Individuals or corporations holding third-party cheques exceeding 50,000 Naira can only have these cheques cleared into their account directly and not paid in cash over the counter.

This policy is in an attempt by the CBN to maintain more currencies in the custody of the bank. While the initiative is applaudable, the benchmark of 50,000 is nonetheless, very low for the already weak Naira and the expensive costs of doing business in Nigeria.

In addition, the letter also reinstated, for the benefit of the doubt, that the already existing limits on clearing cheques above 10,000,000 Naira shall remain in force. This reference by the CBN is in relation to the CBN’s circular dated December 11th, 2009, and titled “maximum limit on cheque payment”, the circular sought to limit any payment on a cheque exceeding 10 million Naira with effect from January 1st, 2010.

All payments exceeding 10 million Naira must be made through the CBN’s e-payment modes, which are the Nigeria inter-bank settlement system electronic funds transfer and the central bank inter-bank settlement system electronic funds transfer. 

3. ATM withdrawal limitations

The CBN’s letter limits the amount to be withdrawn from the Automated teller machines (ATM) to no more than 100,000 Naira per week. The maximum withdrawal per day is 20,000 Naira through the ATMs. This sum applies to both corporate bodies and individuals. 

In addition, banks and other financial service providers have been instructed to only put denominations of 200 Naira and below in the ATMs. The difficulty this measure would cause for small businesses in Nigeria relying on cash for transactions would be overwhelming. 

Also, having a maximum of 200 Naira or less contained in ATMs can cause long queues for individuals withdrawing the maximum daily threshold of 20,000 Naira at a stretch. 

4. POS limitations

There exist limitations as to the maximum amount to be withdrawn through the point of sale (POS) terminals. Individuals and corporate bodies can no longer withdraw amounts exceeding the sum of 20,000 Naira daily using the POS. This entails that transactions using the POS can only be limited to 20,000 per day for every withdrawal.

This is perhaps the CBN’s letter’s most controversial policy. The POS terminals are a form of informal banking practice in Nigeria mostly patronized by the day-to-day Nigerians in their businesses. This limitation would see this patronage on POS operators by businesses fall. Also, the POS is used in supermarkets and other areas of commerce across the country, this policy seeks to reduce the spending habit of Nigerians, for instance, a Nigerian intending on purchasing items worth 30,000 Naira cannot do so using the POS because this limitation by the CBN’s letter.

Exceptions to the rules

The CBN’s letter in paragraph 6 also offered exceptions to the policies provided. This exception relates to circumstances that do not exceed more than a month, where individuals and corporate bodies can undertake cash withdrawals exceeding the maximum limit. Nonetheless, the exception shall not exceed 5 million Naira for individuals and 10 million Naira for corporate bodies.

The exceptions shall also be subject to the processing fees of 5% for individuals and 10% for corporate bodies stated in (1) above. To benefit from this exception, persons must upload the following on the CBN portal:

a. Payee’s valid means of identification;

b. Bank verification number;

c. Notarized declaration by the customer stating the purpose of the cash withdrawal;

d. Senior management approval for the withdrawal by the managing director of the drawee, where applicable; and

e. Approval of the managing director of the bank approving the withdrawal.


It must be noted that this exception left more confusion than clarity. This is because the first policy relating to the over-the-counter maximum withdrawals provides that cash withdrawals exceeding the maximum can be withdrawn subject to the payment of processing fees.

The exception reinstates the same rule but further limits the threshold for withdrawal over the counter to 5 million Naira and 10 million Naira for individuals and corporate bodies respectively even after the payment of processing fees.

When will the policy take effect? The Letter states that the provisions of the policies shall take effect from January 9th, 2023.

Does the policy apply to online banking and USSD transactions? No, online banking and USSD transactions have no threshold prescription and hence the CBN advises the use of these options.

Don't miss a thing. Follow us on Telegram and Follow us on WhatsApp. If you love videos then also Subscribe to our YouTube ChannelWe are on Twitter as MakeMoneyDotNG.

Richard Okoroafor

Richard Okoroafor

Richard is a brilliant legal content writer who doubles as a finance lawyer. He brings his wealth of legal knowledge in corporate commercial transactions to bear, offering the best value that exceeds expectations.

Articles: 431

Leave a Reply

Your email address will not be published. Required fields are marked *