The Central Bank of Nigeria (CBN) issued a directive according to which locals can withdraw a maximum of $225 per week from ATMs.
The institution raised hopes that it could stimulate the usage of mobile transactions, credit/debit cards, and eNaira.
- The CBN has already established a policy to reduce the amount of cash in circulation in the country. The endeavor aims to encourage more electronic-based transactions and thus drive the development and modernization of the domestic payment system.
- The institution went further in its mission, limiting cash withdrawals to $45 per day and $225 per week from ATMs. Individuals will be slammed with a 5% service fee, while businesses will pay 10% if they exceed that amount.
- The Director of Banking Supervision – Haruna Mustafa – believes the step should boost the usage of alternative financing methods, including mobile banking applications, Internet banking, and Nigeria’s CBDC – eNaira. The rules will take effect from January 9, 2023.
- The limits on daily cash withdrawals before that were $337 for individuals and $1,122 for businesses.
- The CBN has been an opponent of cash for years now. The institution thinks too much paper money in circulation propels corruption, leakages, money laundering, and other fraudulent activities.
- High cash usage results in a lot of money outside the formal economy, thus limiting the government’s efforts to cope with inflation and encourage economic growth.
- Speaking of CBDCs, the African nation is among the global leaders in this field. The CBN launched the eNaira in October 2021 under the slogan “Same Naira, more possibilities.”
- The bank tried to accelerate the advancement of the financial product in May this year, allowing local residents to pay their bills, TV subscriptions, and flight tickets using the CBDC.