In a recent development on Monday, the Central Bank of Nigeria (CBN) announced the removal of primary mortgage banks and microfinance banks from its cash withdrawal limit policy. The decision was conveyed through a circular signed by Musa Jimoh, the Director of Payment System Management at the CBN, and addressed to all financial institutions nationwide.
The circular clarified that microfinance banks and mortgage banks catering to the needs of the less privileged are now exempted from paying processing fees for cash withdrawals. This move aims to ease financial burdens and facilitate easier access to funds for customers of these banks.
“The Central Bank of Nigeria hereby directs the exemption of microfinance banks and primary mortgage banks that provide banking services to the economically active poor from paying the processing fee for withdrawals above the cash withdrawal limit for direct cash withdrawals from their correspondent banks.
“This is to enable them to continue to play their expected role in the economy and provide specialized banking services to their customers”
The bank also noted that microfinance banks and mortgage banks are to adhere to the cash withdrawal limits stated in its circular BSD/DIR/PUB/LAB/015/073 dated 21/12/2022.
In December 2022, the CBN in a move to redesign the naira instituted cash withdrawal limits for banks and other financial institutions.
Maximum weekly withdrawal limits for individuals and corporate organizations were set at N500,000.00 and N5,000,000 respectively. It also stated that where the circumstance warrants a withdrawal, a processing fee of 3% and 5% will be charged for individual and corporate organizations respectively.
It also mandated banks and other financial institutions to ensure customers provide their Tax Identification Number, means of identification, and a written note of approval from the MD/CEO of the financial institution authorizing the withdrawal.
According to the CBN then, the new regulations were to be effective from Jan 9, 2023.
The bank explained the policy was to encourage individuals to key into its cashless policy initiative by encouraging the use of alternative transaction channels such as eNaira, mobile banking apps, USSD, internet banking, cards/POS etc.
