Withdrawal Limit
The Central Bank of Nigeria (CBN) may have rescinded its earlier order prohibiting banks from loading higher denomination banknotes into Automated Teller Machines (ATM), saying financial institutions are free to accept payments in any denomination through the channels.
The highest denominations that may be withdrawn from ATMs were limited to N200 by the apex bank as part of the original circular regulating cash holding. Additionally, it set weekly cash withdrawal caps of N100,000 for private individuals and N500,000 for corporate companies.
The limitations were increased in a subsequent notification to N500,000 for individuals and N5,000,000 for corporate entities, respectively. Other aspects of the aggressive cashless policy enforcement were examined, but not the limit on ATM payable denomination.
Yesterday, when the reversed policy went into effect, people anticipated that the banks would start issuing N200 notes at ATM locations. However, almost all ATMs in Lagos continued to issue N1000 and N500, which the CBN views as non-transactional but a store of value in its aim to minimize cash-based transactions, in what was considered a violation of the regulatory regulation.
Osita Nwanisobi, the CBN’s director of corporate communication, claimed yesterday over the phone that the banks had not broken any rules because they were free to fill the ATMs with whichever denominations they desired because they were not subject to any restrictions.
“They can load any denomination. If they have N1000, they should load it; if they have N500 they should load it. If they have N200, they should go ahead and load it,” Nwanisobi told The Guardian.
According to the clarification, commercial banks are not required to give consumers the limited lower denominations through ATMs. Most ATMs are set up to accept N1000, however a handful also accept N500.
A few ATMs used to dispense N200 and N100 bills about ten or twenty years ago, but not any more. The purpose of the CBN directive was to push banks to start recirculating the little notes notwithstanding their reluctance due to the significant cost of managing such small denominations.
According to a media report from the CBN, banks are now only permitted to disburse the new notes through ATMs. The study was released as the redesigned naira remained scarce both inside and outside banks.
However, despite the CBN’s claims, ATMs still accept payments in the banks slated for demonetisation at the end of this month. A few banks said that their customers could now use the new notes to withdraw money from ATMs. However, examinations revealed that many of them continue to use ATMs and cross-pay using old notes.
According to a study conducted by The Guardian from the weekend until yesterday, more over 90% of inhabitants of Lagos, the nation’s financial center, have yet to exchange or use the new notes.
One in ten respondents claimed they are not “bothered,” while three out of five respondents believed Nigerians needed more time to become accustomed to the new notes.
The main justification offered by those who are unconcerned is their conversion to an electronic payment system. Many other people’s decisions are influenced by their lack of faith in the regulatory and centralized financial system.
The Senate is requesting a delay until June, which has raised concerns in the National Assembly over the hasty demonetization of the old notes. It stated that this was necessary in order to lessen any hardship that Nigerians might experience as a result of the return of old notes. Others said that the policy is “too chaotic, confused, and disingenuous” to implement it in such a strict manner.
The CBN, however, claimed that there are no convincing justifications for delaying the deadline past January 31. Godwin Emefiele, the governor, has stated that there are other routes through which people can still transact, despite the use of outdated notes, and that there is no reason why those who store legal currency cannot do so within the bank’s 100-day window.
