Africa¡¯s Most-Populated Nation Nigeria Slashes ATM Cash Withdrawal Limit By 85% To Push Digital Payments

In a big step to push the adoption of digital payments, Africa¡¯s most populous nation Nigeria¡¯s central bank has slashed the daily withdrawal limit from automatic teller machines (ATMs).

Cash Withdrawal Limit Slashed by Over 85%

The Central Bank of Nigeria capped the maximum customer withdrawal at 20,000 naira (approx $44.97) a day, down over 85% from the previous limit of 150,000 naira (approx $336), according to a circular sent to lenders on Tuesday.

Weekly cash withdrawals from banks are restricted to 100,000 naira for individuals and 500,000 naira for corporations. Any amount withdrawn above that limit will attract a fee of 5% and 10%, respectively, the central bank said, as per Bloomberg.

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The Central Bank of Nigeria issued the directive to financial businesses in a December 6 circular, noting that individuals and businesses would now be limited to withdrawing $45 (?20,000) per day and $225 (?100,000) per week from ATMs.

Announcing the changes, the Director of Banking Supervision Haruna Mustafa noted said ¡°Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.¡±

The limits are cumulative limits for each withdrawal, so an individual withdrawing $45 from an ATM who then tries to withdraw cash from a bank on the same day would be hit with the 5% service fee, as per Cointelegraph.

The previous limits on daily cash withdrawals prior to the announcement were $338 (?150,000) for individuals and $1,128 (?500,000) for businesses.

Adoption rates for eNaira have been low since its launch on October 25th, 2021. The Central Bank of Nigeria has reportedly struggled to convince its citizens to use the CBDC (Central bank digital currency). Less than 0.5% of the population reported having used the eNaira as of Oct. 25, a year on from its launch. As per worldometer website, Nigeria currently has a population of over 21.8 crore.

Also Read: UPI & Netbanking Tough Competitors For Digital Rupee: Say Bankers

New Banknotes To Be Issued

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On October 26 this year, the Governor of Nigeria¡¯s central bank, Godwin Emefiele, noted 85% of all Naira in circulation was held outside of banks and as a result, the Nigerian central bank would be reissuing new banknotes in an effort to drive the shift towards digital payments, as per the report.

According to a CBDC tracker from the American think-tank, Atlantic Council, Nigeria is one of 11 countries to have fully deployed a CBDC. It remains to be seen whether this latest step by the central bank will succeed or not. Even if Nigeria's population begins to adopt digital currency, the extent to which it will do so is also something the central bank will observe.

Also Read: Zimbabwe¡¯s 100 Trillion Dollar Note Showcased At UK¡¯s Museum

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