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Tag: Cash Withdrawal

  • Just In: Cash policy fallout as NFIU bans cash withdrawals from public accounts

    Just In: Cash policy fallout as NFIU bans cash withdrawals from public accounts

    The Nigeria Financial Intelligence Unit (NFIU) has banned all banks from executing demands for cash withdrawals from all public accounts.

    This is apparently one of the fallouts of the new cash policy as NFIU Head, Moddibo Haman Tukur, said this has become necessary to stop the rate at which cash was being taken out of public accounts.

    He said this was done “without recourse to the money laundering laws and sometimes for corruption purposes”.

    Tukur, at a briefing, said from 2015 to date, state governments alone have withdrawn N701 billion from their various accounts.

    He said federal bodies withdrew N225 billion while Local Government Council Authorities have withdrawn over N156 billion cash within the same period.

    As a result of the indiscriminate withdrawal of cash from public accounts, the NFIU boss said he had “instructed all financial institutions to stop cash withdrawals from government accounts from March 1, 2023”.

    “Any government official who flouts the order will be prosecuted alongside his or her accomplices,” he said.

    A fallout of this directive, he said, is that “Nigeria will become a full non-cash economy by March 1”.

    He added: “As a consequence, any government official that withdraws even one naira cash from any public account from March 1 will be investigated and prosecuted in collaboration with relevant agencies like EFCC and ICPC.”

    He said the NFIU had told banks and government agencies at all levels and all tiers to move fully into online.

    He said ll transactions involving public money must be routed through the banks for the purpose of accountability and transparency”.

    Tukur said any governor who withdrawals one Naira cash from any bank will be investigated immediately not minding the governor’s immunity.

    However, any cash withdrawal from a public account will henceforth require a waiver from the President and such waiver will be considered on their merits.

  • Nigerians warned against huge physical cash withdrawals

    Nigerians warned against huge physical cash withdrawals

    The Nigeria Financial Intelligence Unit (NFIU) has warned both public and private entities against massive cash withdrawals.

    The Director and Chief Executive Officer of the agency, Mr Modibbo Hamman Tukur, gave the advisory in a statement made available to newsmen in Abuja on Thursday.

    He spoke on the state of the nation’s security threats and financial liquidity.

    HammanTukur advised all federal Ministries, Departments, parastatal Agencies (MDAs), State Governments, Local Government Councils, corporate bodies as well as, civil servants, public and private officers to embrace the cashless policy of money transactions to deepen national security.

    This is to strengthen the country’s security and financial systems, he explained.

    According to him, the Federal and State Governments as well as the 774 local government councils have made cash withdrawals of about N200 billion, N156 billion and N120 billion, respectively, from 2015 to date.

    To curb this excesses, the Federal Government has directed and ordered the stoppage of “direct cash withdrawals by public institutions and officers” with effect from March 1, this year, HammanTukur stated.

    He therefore advised all stakeholders to adopt new technologies of financial transactions and abide by the withdrawal limits or thresholds earlier prescribed by the Central Bank of Nigeria (CBN) for corporate and individual transactions.

    It would be recalled that the CBN had in December 2022 prescribed a threshold of N5 million only for corporate accounts and N500,000 only for individuals per week.

    HammanTukur however explained that no infractions have been recorded so far, but noted that cash withdrawals are still higher than deposits.

    “Liquidity is needed to finance our markets”, he noted, adding that there is no threat to the corruption and money laundering crusade yet.

    Besides, the director assured that any body with genuine need for huge cash transactions would seek presidential approval as there was no “standing waiver” on this policy.

    While warning that the “guideline is not reversible”, he stressed that any cash withdrawal beyond the approved limit would trigger a red flag by the relevant anti-graft agencies.

    He reasserted that Nigeria has been designated as a non-cash society by the World Bank, IMF and ECOWAS, among other stakeholders, with effect from March 1.

    This is in addition to the categorisation of Nigeria as a “high risk” country by the concerned parties because of the enormous security challenges facing the nation, HammanTukur said.

    “We can’t flow with politicians” because of obvious complications, while the set March 1 deadline was sacrosanct, according to him.

    He however expressed optimism that the cash transactions would drop from the current N3 trillion to about N1 trillion when the policy became effective.

    The NFIU director reminded Nigerians that three years imprisonment, payment of equivalent value of money involved or both punishments awaited violators of the cashless policy.

    HammanTukur underscored the teeth of the “Rnforcement, guidelines and policies for mitigation of money laundering, terrorist financing, proliferation of weapons and prevention of predicate crimes” Act of 2022.

    He particularly cited Sections 2 and 22 of the NFIU laws of 2022 to buttress his threat.

  • Cash withdrawal limit not based on politics – CBN

    Cash withdrawal limit not based on politics – CBN

    The Central Bank of Nigeria (CBN) says its policy of cash withdrawal limit is not based on politics, contrary to insinuations.

    Mrs Aisha Ahmad, the Deputy Governor, CBN, said this in Abuja on Thursday when she answered questions from lawmakers at the House of Representatives during plenary.

    Ahmad, who represented the CBN Governor, Mr Godwin Emefiele, said the policy was sequel to critical thinking, research and other considerations.

    She was responding to a question by Rep. Chinedu Obidigwe (APGA-Anambra) who wanted to know if the policy was aimed at favouring the ruling All Progressives Congress(APC) in 2023 general election.

    Ahmad said that the CBN had ordered for N500 million to be printed for circulation, adding that the bank had been flexible by reviewing the policy upward from N100,000 to N500,000 for individuals and from N500,000 to N5 million for corporate bodies.

    She said that the policy was expected to create new jobs in the ICT sector, contrary to insinuations that it would lead to job lost.

    She said the operators of Point on Sales (POS) would not be affected by the policy, adding that that the CBN was aware that the POS had created a means of livelihood for about 4 4 million Nigerians.

    Ahmad was grilled by the lawmakers who asked questions bothering on the cash policy.

    Rep. Femi Gbajabiamila, the Speaker, said the reason why the house should be briefed on such policy was because the lawmakers represented the people.

    He added that although naira redesign may be a good intention, it was necessary for the apex bank to carry the lawmakers along.

    Gbajabiamila queried the CBN rationale for three months’ notice, when other apex banks usually gave more than a year’s notice for such policies.

    “How come can we rationalise three months’ notice in a cash-full society compare to England where a year notice was given,” he said.

  • UPDATE: Read full statement by CBN restricting cash withdrawal

    UPDATE: Read full statement by CBN restricting cash withdrawal

    The Central Bank of Nigeria (CBN) on Tuesday announced a new policy that mandates banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively, per week.

    TheNewsGuru.com (TNG) reports the restriction on cash withdrawal was contained in a circular titled: “Naira Redesign Policy – Revised Cash Withdrawal Limits”, which was signed and released by Haruna B. Mustafa, CBN’s Director of Banking Supervision.

    The circular reads in full below:

    Further to the launch of the redesigned Naira notes by the President of the Federal Republic of Nigeria, on Wednesday, November 23, 2022 and in line with the Cash-less policy of the CBN, all deposit money banks (MBs) and other financial institutions (OFIs) are hereby directed to note and comply with the following:

    1. The maximum cash withdrawal over the counter (OTC) by individuals and corporate organizations per week shall henceforth be M100,000 and N500,000 respectively. Withdrawals above these limits shall attract processing fees of 5% and 10%, respectively.

    2. Third party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.

    3. The maximum cash withdrawal per week via Automated Teller Machine (ATM) shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.

    Only denominations of N200 and below shall be loaded into the ATMs.

    The maximum cash withdrawal via point of sale (PS) terminal shall be N20,000 daily.

    In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000.00 and N10,000,000.00 for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees in (1) above, in addition to enhanced due diligence and further information requirements.

    Further to (6) above, you are required to obtain the following information at the minimum and upload same on the CB portal created for the purpose:

    a. Valid means of identification of the payee (National ID, International Passport, Driver’s License).

    b. Bank Verification Number (BVN) of the payee.

    c. Notarized customer declaration of the purpose for the cash withdrawal.

    d. Senior management approval for the withdrawal by the Managing Director of the drawee, where applicable.

    e. Approval in writing by the MD/CEO of the bank authorising the withdrawal.

    Please further note the following:

    i. Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the Banking Supervision Department.

    ii. Compliance with extant AML/CFT regulations relating to KYC, ongoing customer due diligence and suspicious transaction reporting etc. is required in all circumstances.

    iii. Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.

    Finally, please note that aiding and abetting the circumvention of this policy will attract
    severe sanctions.

    The above regulatory directives take effect nationwide from January 9, 2023

  • BREAKING: CBN puts restriction on cash withdrawal

    BREAKING: CBN puts restriction on cash withdrawal

    The Central Bank of Nigeria (CBN) has announced a new policy that mandates banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively, per week.

    TheNewsGuru.com (TNG) reports the revised cash withdrawal limits are contained in a circular issued by CBN on Tuesday, which the apex bank says will take effect nationwide on January 9, 2023.

    The new policy stated that the maximum cash withdrawal via automated teller machine shall be restricted to N100,000 subject to a maximum of N20,000 cash withdrawal per day and further restricted point of sales (POS) withdrawal to N20,000 daily.

    It further stated that only denominations of N200 and below shall be loaded in automated teller machine (ATM).

    The new policy, according to CBN encourages customers to use alternative channels such as internet banking, Mobile banking app, USSD, eNaira, e.t.c. for financial transactions.

    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.

    ALSO READ || UPDATE: Read full statement by CBN restricting cash withdrawal

  • Nigerian banks stop cash withdrawal from ATMs abroad

    Nigerian banks stop cash withdrawal from ATMs abroad

    Commercial banks have suspended all cash withdrawals from overseas Automated Teller Machines (ATMs), except for customers whose cards are linked to domiciliary accounts funded locally.

    Recall that banks have been encouraging travellers to open and fund dollar accounts, which aside having no spending limits, provide them the flexibility to spend at all times.

    The lenders are also raising their card spending limits on Point of Sale (PoS) and online card transactions abroad, an indication of increased dollar liquidity and rising exchange rate stability.

    Guaranty Trust Bank (GTBank) and First City Monument Bank (FCMB) at the weekend raised their monthly card spending limit on overseas PoS and online transactions from $1,000 to $3,000 and around $2,000 to $5,000.

    GTBank informed its customers of the increase via email. “We would like to inform you that our monthly spending limit on your GTBank Naira MasterCard has been reviewed to $3,000 from $1,000 for your international online and PoS transactions. Kindly note that international ATM cash withdrawal is still restricted,” it said.

    “Clothing, shoes, electronics, books…whatever your needs are FCMB Naira Debit Card gives you instant full access to $5,000 monthly to shop online”, FCMB said in an email sent to its customers at the weekend.

    GTBank had nearly two years ago during the height of the dollar scarcity limited monthly transactions on PoS and online transactions using cards to $100, British Pounds Sterling 90, Euro 130 and Canadian Dollar 360. The prevailing dollar scarcity at that time made it difficult for travellers to pay their hotel bills and make reservations and other transactions using their debit cards.

    Many banks which announced the suspension of their overseas ATM card services in October 2016 have all lifted the suspension and raised monthly transaction volumes for customers on foreign currency-denominated deals, including those conducted on PoS machines and online.

    The dynamics changed in April last year when the Central Bank of Nigeria (CBN) introduced the Investors’ & Exporters’ (I&E) Forex window which has so far attracted over $53.9 billion to the economy. The dollar inflows have helped to strengthen the naira against the greenback and brought stability to the forex market.

    Financial analysts at Afrinvest West Africa said stability in the forex market followed the increased volume of forex interventions and the coming of I&E FX window, which allows for flexibility in pricing of forex as well as efficiency and transparency in allocation.

    For instance, in the first half of 2018, transactions in the I&E Forex window stood at $30 billion, surpassing the $23.9 billion total turnover recorded in 2017 and bringing the overall transactions to $53.9 billion. Although the CBN’s participation is estimated at 30 per cent of the transactions in the window, the increased level of participation to some extent underscores the flexibility of the market as well as investors’ preference of the I&E as the platform for Forex deals.

    According to an Afrinvest report titled: “Nigerian economy and financial market H1:2018 review’ released at the weekend, the investment and research firm, said Nigeria’s economic recovery path had been reinforced by the sustained stability in oil prices with four consecutive quarters (since second quarter of 2017) of positive, slow but steady growth.

    It, however, said economic activities slowed in the first half of this year, given the delayed passage and implementation of the 2018 “Budget of Consolidation”, a major limiting factor in the drive towards implementing the Federal Government’s Economic Recovery and Growth Plan (ERGP) – the fiscal paper drafted to address some of the deep-rooted structural imbalances in the economy.

    “In addition, food supply disruptions resulting from the current security crises – which in turn fuelled inflationary pressures – coupled with tighter monetary stance of the CBN towards stabilising the currency market, contributed to the slow growth rate reported. Nonetheless, the domestic macroeconomic performance has been largely satisfactory on the back of persistent disinflation, rising oil prices and external reserves, increased foreign exchange liquidity with frequency of interventions, improved total capital flows into the country and favourable balance of trade,” the report said.

    It said the rise in oil prices impacted positively on Nigeria’s foreign reserves, rising 22.7 per cent to $47.6 billion on June 13, 2018 from $38.8 billion on December 29, 2017.

    Consequently, the CBN maintained its exchange rate peg with the naira appreciating to N305.80/$1 (June 2018) from N306/$1 (December 2017) in the official window while the stability and liquidity in the foreign exchange market improved as seen in the growing confidence by investors in the I&E Forex window in the first half of this year relative to fiscal year 2017.

    The forex window has largely removed the pressures from the parallel market rate which now, sometimes, trades at a discount to the Nigerian Autonomous Foreign Exchange (NAFEX) rate.

    Also, Renaissance Capital’s (RenCap’s) Sub-Saharan Africa (SSA) Economist, Yvonne Mhango, predicted that the naira would end the year at N356 to dollar in the parallel market. RenCap is a leading frontier market research and investment firm based in many countries, including Nigeria. The local currency exchanges around N360/$ in the parallel market.

    In a report titled: “Nigeria: First Quarter 2018 Current Account – surplus swells” , she said Nigeria’s current account (CA) surplus increased to 4.6 per cent of Gross Domestic Product -GDP (annualised) in first quarter against 3.3 per cent in first quarter of last year.

    “This was in part due to strong export growth of 44 per cent year-on-year in first quarter against 31 per cent in first quarter of last year. That said, imports are also recovering; they grew by the fastest rate since 2014. A one-third increase in current transfers (remittances) helped mitigate a strong increase in income outflows and payments to foreign service providers. We revise our 2018 CA/GDP forecast up slightly to 3.4 per cent, from 3.3 per cent previously. This supports naira stability and our year forecast is N356/$1,” she said.