Digital Currency “Goes Live” in Africa? Nigeria Limits ATM Withdrawals to Promote Digital Currency

By Retail Banker International
Global Research, December 08, 2022
Retail Banker International 7 December 2022
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The Central Bank of Nigeria has announced a cap on customer ATM withdrawals in a bid to promote the usage of digital currency eNaira.

In a statement, the banking regulator said the maximum customer ATM withdrawal for naira has been capped at NGN20,000 ($45) per day. In comparison to the earlier daily cap of NGN150,000 ($337), this represents a significant reduction.

The central bank has also imposed a limit on weekly cash withdrawals to NGN100,000 ($225) from banks for individuals and NGN500,000 ($1,124) for corporations.

Any withdrawals above the said limit will attract a processing fee of 5% and 10%, respectively, the regulator said.

In addition, the central bank has imposed a limit of NGN10m ($22,553) on cheques processed through the banking system and prohibited the cashing of cheques for more than NGN50,000 ($112) over the counter.

The daily maximum for cash withdrawals from point-of-sale terminals is NGN20,000 ($45).

The move is the most recent in a series of directives issued by the central bank to reduce the usage of cash and promote digital currencies to increase access to banking services.

According to Bloomberg’s report, Nigeria’s economy is largely informal, with cash outside banks representing 85% of currency in circulation.

Around 40 million adults in Africa’s most populous nation do not have a bank account, the report added.

Last month, the central bank announced plans to issue new high-value notes from mid-December to mop-up excess cash.

“Customers should be encouraged to use alternative channels — Internet banking, mobile banking apps, USSD, cards, POS, eNaira to conduct their banking transactions,” the central bank said.

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Featured image: Weekly cash withdrawals from banks have also been capped. Credit: Jake Allen on Unsplash.

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