By LEVI JOHNSON
New CBN Cash Withdrawal Policy Explained as Nigerians, Businesses Brace for Major Shift
The Central Bank of Nigeria (CBN) has rolled out a far-reaching cash withdrawal policy that is already reshaping how Nigerians access and use physical money, with strict weekly limits and steep penalty charges now in force for both individuals and businesses.
Under the new directive, the apex bank has capped weekly cash withdrawals for individuals at ₦500,000, while businesses operating corporate accounts are limited to ₦5 million per week. Withdraw beyond these thresholds now attract penalty charges of up to 5%, a move analysts say is deliberately designed to push Nigeria further toward a digital-first financial system.
The policy applies across all withdrawal channels—ATMs, POS cash-back services, and over-the-counter bank withdrawals—and is tracked centrally across the banking system, meaning Nigerians can no longer bypass limits by spreading withdrawals across multiple banks.
CBN Withdrawal Limits: What Individuals Must Know
For personal bank account holders, the CBN has fixed a ₦500,000 cumulative weekly withdrawal limit. Once this threshold is exceeded, a 3% charge applies only to the excess amount, not the entire withdrawal.
For example, if an individual withdraws ₦700,000 in one week, the breakdown looks like this:
Allowed amount: ₦500,000
Excess withdrawal: ₦200,000
Penalty fee: 3% of ₦200,000 = ₦6,000
That means the customer pays ₦6,000 simply for exceeding the weekly cash limit.
Importantly, the CBN has made it clear that withdrawals are tracked per individual, not per bank or account. Whether the money comes from one bank or five different banks, the total weekly withdrawal still counts.
Corporate Accounts Face Even Higher Charges
For businesses, the limits are significantly higher, but so are the penalties.
Corporate account holders can withdraw up to ₦5 million weekly. Any amount above that threshold attracts a 5% penalty fee.
If a business withdraws ₦7 million in one week, the calculation is straightforward:
Allowed amount: ₦5 million
Excess withdrawal: ₦2 million
Penalty fee: 5% of ₦2 million = ₦100,000
For cash-dependent businesses, these charges can quickly run into millions of naira annually.
ATM Withdrawals Still Limited to ₦100,000 Daily
In addition to the weekly cap, ATM withdrawals remain limited to ₦100,000 per day. However, these daily withdrawals now count toward the ₦500,000 weekly total.
This means an individual who withdraws ₦100,000 daily for five days will exhaust their entire weekly limit by Friday. Any further cash withdrawal—whether from an ATM, POS, or bank counter—will automatically attract the 3% excess charge.
How the New Policy Will Affect Everyday Life
1. Cash-Heavy Lifestyles Will Become Costly
Regular cash users will now pay a premium for their habits. In contrast, bank transfers, mobile banking, and POS payments remain free and unlimited, making digital payments the cheaper option.
2. Pressure on ATMs May Increase
With daily ATM limits unchanged, queues at ATMs could grow as more people attempt to spread withdrawals across the week.
3. Withdrawal Charges Can Add Up Fast
An individual withdrawing ₦800,000 weekly will now pay about ₦9,000 every week, amounting to roughly ₦468,000 annually in penalty fees alone.
4. Small Businesses Must Rethink Cash Operations
Cash-based businesses that regularly need ₦10 million weekly could face ₦250,000 in charges every week, or ₦13 million annually, if they fail to adapt.
What Has Not Changed Under the New CBN Policy
Despite public anxiety, the CBN insists that cash has not been banned. In fact, some aspects have improved:
Cash deposits are now completely free, with all previous deposit charges removed
Bank transfers remain unlimited and unrestricted
POS payments are unaffected and do not count toward withdrawal limits
Cash remains legal tender for all transactions.
How Nigerians Can Avoid 3–5% Withdrawal Penalties
Financial experts advise Nigerians to adjust quickly by reducing reliance on physical cash. Planning withdrawals across multiple weeks, paying bills digitally, keeping emergency funds in transferable accounts, and paying suppliers via bank transfers are now critical strategies.
The CBN has also warned that splitting withdrawals across different banks does not work, as all withdrawals are tracked centrally per individual or business.
CBN’s Bigger Goal: Pushing Nigeria Toward Digital Finance
The apex bank says the policy aligns with global trends toward cashless economies, improved transparency, and reduced financial crimes such as money laundering.
While Nigerians can still withdraw large sums if necessary, the message is clear: cash is becoming more expensive, while digital payments remain cheaper and easier.
Final Takeaway
The new CBN cash withdrawal limits mark a turning point in Nigeria’s financial landscape. Nigerians who plan ahead and embrace digital tools will largely avoid penalties. Those who cling to heavy cash use, however, may find the costs rising sharply.
Cash is not disappearing—but under the new rules, using too much of it now comes at a price.
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