Nigeria Central Bank to Ration Naira Notes After Redesign
By Bashir Olanrewaju
Nigeria’s monetary regulator, the Central Bank of Nigeria, has imposed cash-withdrawal limits on companies and individuals following its redesign of the country’s currency notes.
With effect from January 9, cash withdrawals by individuals will be limited to 100,000 naira a week or 20,000 daily and 100,000 naira for corporate organizations either over-the-counter in bank halls or through automated teller machines (ATMs), Haruna Mustafa, the CBN’s director of banking supervision, said on Tuesday in a circular.
Withdrawals above these amounts, to be permitted “in compelling circumstances,” will attract service charges of 5 percent of the requested amount for individuals or 10 percent for organizations, the CBN said in the statement. These amounts won’t exceed 5 million naira for individuals and 10 million naira for business entities.
Nigerians were urged by the Central Bank to make more use of cashless alternatives including internet banking and other digital options.
CBN Governor Godwin Emefiele had announced late in October a plan to redesign the major denominations of the naira as part of a move to regain control over cash in circulation, 85 percent of which he said was outside the banking system.
The decision to ration naira notes in circulation is also expected to stifle a rising kidnap-for-ransom industry that thrives on the movement of large sums of cash. While deemphasizing cash, the authorities also want financial transactions to be traceable as part of their efforts to combat crime as well assess due tax.