Nigeria limits ATM cash withdrawals to over $225 per week to ensure the smooth adoption of its Central Bank Digital Currency.
Nigeria cuts down cash withdrawal from ATMs to push for its cashless agenda. The country aims to enable the adoption of eNaira, Nigeria’s Central Bank Digital Currency.
The Central Bank of Nigeria directed financial institutions to limit withdrawals. Individuals and businesses will be limited to withdrawing $225 per week from ATMs.
Limits on withdrawals
Individuals and businesses violating the directive will face a 5% and 10% penalty fee. The penalty fee will be placed on amounts above the set limits.
The Director of Banking Supervision, Haruna Mustafa, issued the maximum cap. The maximum cash withdrawal is capped at $45 per day. The amount tallies at 20,000 Naira per day.
The withdrawals will be through point-of-sale terminals. Customers are encouraged to use alternatives, including mobile banking, internet banking, eNaira and USSD. The limits represent cumulative limits for each withdrawal.
Previous limits on daily cash withdrawal capped at $338 (150,000 nairas) for individuals and $1128 for businesses. An individual withdrawing $45 via ATM and trying to cash in from the bank will receive a 5% penalty.
CBDC growth in Nigeria
Apparently, the adoption of eNaira has remained low since the launch of the CBDC in October 2021. The Central Bank of Nigeria struggled to convince its citizens to use the eNaira.
Less than 0.5% of the total population actually used the eNaira in transactions. Nigeria started its shift from physical cash to a cashless policy in 2012.
The country aimed to make its payment system more efficient and reduce the cost of banking services. Nigeria also sought to improve the effectiveness of its monetary policy. The governor of Nigeria noted that 85% of all Naira in circulation was held outside banks.
