Customers of organised banks and providers of mobile money have expressed displeasure with the Central Bank of Nigeria's new withdrawal restrictions (CBN). They assert that because of the rules, the bank wants to drive them out of business.
The weekly ATM cash withdrawal limit set by the central bank is N100,000 for private persons and N500,000 for corporations.
In a circular distributed to all deposit money banks (DMBs) and other financial institutions yesterday, the CBN made that information available.
Mr Haruna Mustafa, Director of the CBN's Banking Supervision Department, signed the document.
It further stated that there is a daily cap of N20,000 and a weekly cap of N100,000 for utilising ATMs.
Additionally, the CBN instructed DMBs and OFIs to only restock ATMs with notes valued at N200 or less.
The CBN's cash distributing strategy has drawn criticism from the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), which claims it will hurt business for mobile banking agents.
Olojo Victor, the president of AMMBAN, remarked on the new rule by saying, "They want to put us out of business.
“We are against this. This is not driving us forward. It is counter-productive. It does not represent what the CBN initially stood for regarding financial inclusion.
“It is a punishment for an average Nigerian. A bag of rice is N48,000. That means I can’t take cash if I want to go to the market. How will I do the transaction?
“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitised.
“There is no alternative, and you are taking out cash. You are running a cash-dominant economy as we speak.
“Cash remains king whether we like it or not. Go to the average market; we still have more cash transactions than PoS, and suddenly you want to seal cash without bringing alternatives and educating Nigerians on how the other options work.
“This will not fly. It is not suitable. It is a good idea but not at the right time.”
In contrast, Dr Uju Ogubunka, president of the Bank Customers Association of Nigeria, BCAN, praised the CBN for the move.
He did, however, point out that in a country where most people are market women who do not have access to electronic payment systems, such a strategy would be doomed to fail.
“What they are telling us is that we should use online banking more than we use cash. They are not stopping us from using the money in our accounts.
“They are saying that we should focus more on using electronic payments to do more transactions.
“But given the level of our people and even the use of mobile applications for banking transactions, it might be a big challenge.
“Like I was telling somebody earlier today if I want to buy vegetables in the market, how do I transact that business without cash? It won’t be easy.
“We don’t expect to carry phones to transfer money to market women.
“There are areas you can apply electronic banking, and there are areas you cannot,”
Ogubunka added that the CBN’s strategy would hurt business during the holiday season because the banking industry does not have the necessary infrastructure to support it.
He then expressed concern over the potential for an uptick in fraudulent electronic payment channels and unsuccessful bank transactions.