CBN Exempts Microfinance Banks From Cash Withdrawal Limits

CBN has exempted microfinance banks (MFBs) and principal mortgage banks (PMBs) from charging processing fees for cash withdrawals in excess of the cash withdrawal limitations.

This is stated in a circular signed by Musa Jimoh, director of payments system management, and released on Monday.

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“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 processing fees for withdrawals above the cash withdrawal limits for direct cash withdrawals from their correspondent banks.”

“This will allow them to continue to play their expected economic roles and provide specialised retail banking services to their customers.”

“Please be advised that the microfinance and main mortgage banks are expected to completely comply with the cash withdrawal limitations when serving their customers in accordance with the circular dated December 21, 2022, with reference number BSD/DIR/PUB/LAB/015/073.

The CBN urged deposit money banks and other financial institutions in December 2022 to guarantee that weekly over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively.

However, in response to varied reactions from Nigerians, the apex bank upped the maximum weekly limit for cash withdrawals by individuals and business organisations across all channels to N500,000 and N5 million, respectively.

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The top bank stated that under compelling circumstances when a cash withdrawal in excess of the prescribed limit is required for lawful purposes, a cash withdrawal in excess of the indicated limit will be permitted.

According to the CBN, the goal is to strengthen the cashless strategy and lower the amount of currency outside the banking system.