The Central Bank of Nigeria (CBN) on Tuesday, introduced a new policy that mandates deposit money banks and other financial institutions reduce over-the-counter cash withdrawals to N100,000 and N500,000 for individuals and corporate entities respectively, per week.
The revised cash withdrawal limits was contained in a circular issued by the apex bank.
It will take effect nationwide on January 9, 2023.
After the policy takes effect, all cash withdrawals in excess of the stated limits will attract processing fees of 5% and 10%, respectively.
The new policy is coming barely weeks after President Muhammadu Buhari launched the newly redesigned N200, N500, and N1000 banknotes.
CBN will reduce volume of N500, N1000 notes in circulation – Emefiele
The Central Bank of Nigeria (CBN) has revealed its plans to reduce the volume of N500 and N1000 notes in circulation to tame inflation.
The governor of CBN, Godwin Emefiele, stated this last month while taking questions from journalists at the monetary policy committee (MPC) meeting in Abuja.
Emefiele said increasing the high denomination of the currency could be part of factors fuelling inflation in the country.
Making reference to the United Kingdom, he said the highest denomination in the UK is £50. Adding that the most spent currency in the country is £10.
“Rarely you find some people spend £20. Nobody sees £50. If you go around carrying £50 in the UK, they will begin to suspect you. Whereas, the reverse is what is happening in Nigeria. Nigerians want to carry N1,000 or N500,” he said.
“In fact, we’re beginning to see or think that increasing the high denomination bills is also part of what may even be fuelling inflation.
“So, over time, we will reduce the volume of N500 and N1000 in circulation.
“Let people carry N50 around. If you want to do high-value transactions, embrace online, embrace our agency programme, embrace our mobile banking programme. That is what you need. You want to conduct legal banking or financial services transactions, you have no business carrying N1,000.”