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  On the 6th of December, the Central Bank of Nigeria (CBN) announced a new policy that mandates deposit money 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. 
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Several experts and observers have reviewed the CBN withdrawal policy, which so far has been that of mixed feelings. For some, the CBN policy is the right step in the right direction. First, as the world moves into a cashless economy, the CBN policy of limiting personal and corporate transactions to only N100,000 and 500,000 per week respectively will speed up the process of a cashless economy, thus leading to the use of other options such as digital platforms and USSD codes. Furthermore, restricting only N200 to be loaded into ATMs will allow for financial inclusion as people in the lower strata will actively access lower denominations of the Naira over the higher denominations. Others believe that the policy will deter wanton display of cash in public events, hence forcing people to adopt other means such as wireless transfer.
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Also, some believe that the policy will discourage vote buying during elections. It is a well-known fact in Nigeria that politicians and their orderlies withdraw huge amounts of cash, especially of higher denomination,  from banks during electoral periods, to buy votes. With this new policy in place, politicians might find it difficult to access higher denominations and might have to rethink withdrawing the N200 denomination at the rate of N100,000 per week. Furthermore, with this withdrawal policy following the recent redesign of the Naira, which forced several hoarded cash into the banking system, many noted that the new withdrawal policy will give the CBN more grasp over the available money in the country and of course determine the cash flow and circulation across the country.
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On the other hand, many have decried the policy stating that it would negatively affect small businesses as limiting transactions to N500,000 per week would be harsh. Kalu Aja, a financial expert believes that the CBN’s actions on the Naira redesigning and limited cash withdrawals are fine as long as POS, mobile money, and other noncash transactions are offered at reduced prices. He, however, proposes that other alternatives; such as writing a cheque, transfer, or mobile banking – which are trackable, should be utilized. In conclusion, some believe that the development is geared towards improving the acceptance and usage of eNaira in the country. According to Olumide Adesina, the limits set by the CBN are also part of a larger push to facilitate the use of the air. Featured Image Source: The Sun NG
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This article was first published on 9th December 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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