The Central Bank of Nigeria (CBN) has introduced a new policy setting a daily withdrawal limit of N100,000 on Point-of-Sale (PoS) transactions. This directive, issued through a circular to all Deposit Money Banks (DMBs), microfinance banks, mobile money operators, and super-agents, is part of the CBN's ongoing effort to promote a cashless economy and enhance the efficiency of financial services in the country.
Key Highlights of the New Directive
The CBN's latest move aims to regulate cash withdrawals through PoS terminals and create uniform operational standards within the financial services sector. The primary goal of the directive is to combat fraud, reduce the overreliance on cash, and ensure that electronic payment systems function optimally across Nigeria.
1. Daily Withdrawal Limit: The new regulation stipulates that all agent banking terminals must have a daily cash-out limit of N100,000 per customer. This applies regardless of the specific channel or method used for the transaction. The daily limit is designed to limit large withdrawals that could potentially disrupt the balance of the economy while encouraging the use of digital financial tools.
2. Weekly Cash-Out Limit: In addition to the daily withdrawal limit, the CBN has also set a weekly cash-out limit of N500,000 per customer. This applies across all banking channels, ensuring that customers can still access sufficient cash over a longer period without overwhelming the system with high-volume transactions.
Addressing Fraud and Enhancing Security
The CBN emphasized that the new policy is aimed at reducing the risk of fraud and improving the security of financial transactions in the country. By limiting the cash-out amounts, the central bank hopes to create a more transparent transaction system that can be more easily monitored and audited.
The CBN's focus on enhancing security measures comes in response to concerns regarding fraudulent activities, including identity theft and other types of financial crimes that have plagued the banking sector.
A Step Toward a Cashless Economy
The CBN’s decision to set withdrawal limits is also part of a broader strategy to transition Nigeria towards a more cashless society. With digital payment systems becoming more widely adopted, the central bank aims to reduce the reliance on physical cash, streamline financial transactions, and encourage greater use of electronic payment systems.
The move comes at a time when the Nigerian economy has seen increased interest in digital payment methods, particularly mobile money and PoS transactions. By instituting withdrawal limits, the CBN seeks to ensure that the growth of these systems remains manageable and does not lead to liquidity imbalances in the economy.
Compliance and Enforcement
The circular directs all relevant financial institutions, including banks, microfinance institutions, and mobile money operators, to implement the new limits immediately. Failure to comply with the regulations could result in sanctions or penalties. The CBN has called on agents and financial service providers to make necessary adjustments to their systems to comply with the new rules and ensure a smooth transition.
The Central Bank of Nigeria’s latest policy on limiting PoS withdrawals is a significant step in the country’s drive toward a more secure and efficient cashless economy. By implementing these limits, the CBN aims to address critical issues such as fraud, liquidity management, and operational consistency across the financial sector. As the country continues to embrace digital payments, this new initiative underscores the CBN's commitment to improving financial inclusion while fostering a more transparent and robust banking ecosystem.
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