Breaking News: Aiming to slow down inflation rates the Central Bank of Nigeria (CBN) has began mopping up excess cash in circulation by imposing cash withdrawal limits in Nigerian banks; 9am News Nigeria can report.
According to the CBN’s Money and Credit Data, the currency in circulation has increased to N4.07 trillion in August 2024, making it the highest level of cash in circulation ever.
This figure indicates an 11% increase since the start of the year 2024 and a 56% increase since August 2023.
9am News Nigeria recounts that Nigeria grappled with an severe cash shortage during the twilight of former President Muhammadu Buhari’s regime when the government attempted to resigned some of the country’s currency notes and mop up old notes.
In a recap of the circular issued by the CBN in November 23 2022 and made available to Ogasabi of 9am News Nigeria the bank said “The maximum cash withdrawal limits over the counter (OTC) by individuals and corporate organisations per week shall henceforth be N100, 000 and N500, 000 respectively. Withdrawals above these limits shall attract processing fees of five and 10 percent, respectively
“Third party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000 000 on cleaning cheques still subsist. The maximum cash withdrawal per week via Automated Teller Machine (ATM) shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
“Only denominations of N200 and below shall be loaded into the ATMs. The maximum cash withdrawal via point of sale (PoS) terminal shall be N20,000 daily.
“In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5 million and N10 million for individuals and corporate organisations, respectively.”
More than one year since the inauguration of the President Bola Tinubu administration the CBN has not changed its stance on the policy although it has soften its enforcement.
Many banks still do not allow daily withdrawals beyond N20,000. And cash it often not available in many bank’s Automated Teller Machines (ATM).
These factors have made many Nigerians disinterested in keeping their money in banks. Many now resort to the old style of stashing cash in their homes rather than depositing it at the bank.
One business woman Gloria Duke detailing her change of attitude towards banking said “I don’t like to move around with cash, but last year was hell for me and my family and even now no one is sure of what they are doing with cash.
“I won’t be depositing money for now, I have to wait and watch how long this development will stay. You know the saying, once beaten twice shy.”
A financial expert Dr Patrick Modilim commenting on the issue wondered how the CBN is recording a surge in the amount of cash in circulation when the bank is not injecting more cash in circulation. He said “The money in the bank is less than 50 percent of the money in circulation. And CBN keeps issuing more money to government to fund their expenses. But they don’t have the money, and that is what is causing this problem of inflation”.
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