May 18, 2024

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CBN Order Banks to Pay N20,000 Daily OTC

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CEM REPORT, FINANCE | To abate the plight of the Nigerians, the Central Bank of Nigeria has approved the Over-the-counter withdrawal of new naira notes by banks to a maximum daily payout limit of N20,000.

This is an improvement from the initial total embargo on over-the-counter withdrawal by CBN, coming amidst long queues at ATMs and limited cash with POS operators.

This is according to the apex bank’s recent notification issued on Thursday.


“While reiterating our commitment to Nigerians to ensure the effective distribution of the newly introduced Naira banknotes, we urge them to exercise patience as the CBN is working assiduously to address the challenge of queues at ATMs.

“In line with this resolve, the Governor, Mr Godwin Emefiele, has directed deposit money banks (DMBs) to commence the payment of the redesigned Naira notes over the counter, subject to a maximum daily payout limit of N20,000.

The Central Bank also urged Nigerians to embrace and adopt other payment channels for their transactions, citing that the Naira is Nigeria’s legal tender and symbol of national pride which should be respected and handled with care.

While the country is still battling with fuel scarcity, Nigerians have to endure long queues at ATMs to make cash withdrawals owing to the new naira redesign policy.

POS operators have since increased charges as much as 20% per one thousand on the claims that they pass through the needle’s eye to obtain cash.

[READ ALSO] Currency Redesign and Circulation Poses Risk to Economic Growth in Q1’23

CEM gathered that POS operators buy cash from traders at varying prices to keep business running.

An operator who wished to remain anonymous stated that she obtained hundred thousand naira (N100,000) cash for ten thousand naira (N10,000) from market traders. She further revealed that it has now become a new source of income as there are stands in the market where POS operators go to buy cash.

The extra cost of acquiring cash is been pushed back to the end user as POS operators have since increased charges.

Our correspondent went to make withdrawals from several vendors around the Isheri-Ijegun area. From the regular N100 per five thousand (N5000) and below, the charge is now N200 per one thousand, implying that for a N5,000 withdrawal, the charge is N1,000.

Our source from other parts of Lagos also revealed that so is the case or more depending on the stress and cost of cash acquisition.

While the CBN maintained that it has supplied the new notes to banks, the banks claim not to have the notes in supply.

Videos online reveal that several Nigerian have gone violent with banking staff and security all in a means to get their money.

Trending videos have revealed people going as far as taking off their clothes.

Although the CBN continues to encourage other means of transaction other than cash, it appears Nigerians are still far from embracing such means.

While not all kinds of transactions can be performed electronically like transportation, CEM sources have reported that transport operations now receive their fare using electronic means.

The scarcity of cash may be a curse however if critically examined there may be a silver lining as fintech firms could create unique payment methods for transport operations and petty traders who believe the POS terminal is for big businesses.

The hope is with the new directives the quagmire association with cash will see some peace.


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