…Cash withdrawal limit in most banks now N10,000, N5,000 — Investigation

…Old notes remain legal tender – CBN

By Precious Owolabi

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As Christmas draws near, Nigerians have continued to grapple with a resurgence of naira scarcity, raising concerns about the ability of citizens to enjoy the celebrations.

Reports from several states indicated long queues at banks and their Automated Machines (ATMs), with many struggling to access cash for day-to-day transactions.

The situation, reminiscent of the cash crunch earlier this year in the era of the now embattledformer CBN Governor, Mr. Godwin Emefiele, has left traders, transport operators, and shoppers frustrated for some weeks, as electronic payment systems remain inconsistent in some areas.

In Akure, the Ondo State capital, bank customers have resorted to spending hours in banking halls or at ATM centres, with limits imposed on withdrawals in many locations.

This has had a ripple effect on preparations for the festive season, as traders lament low patronage owing to the unavailability of cash, it was observed.

Rural communities, which largely depend on cash transactions, are worst hit, with reports of locals travelling long distances to access basic financial services.

Many, however, fear this could dampen the traditionally vibrant Christmas celebrations.

Economic analysts have meanwhile attributed the scarcity to increased demand for cash during the festive period, coupled with ongoing challenges in Nigeria’s financial system.

Investigations by The Hope revealed that banks have reduced their daily over-the-counter cash withdrawal limit to N10, 000.

This is because the banks maintained the existing N20,000 daily withdrawal limit from ATMs, making it difficult for customers to access funds.

Bank customers were seen grumbling inside the bank halls at the popular Alagbaka area of the capital City, where there are clusters of banks, following their frustrations occasioned by the withdrawal limit policy of the banks.

The development has raised the Point of Sale (POS) charges as operators charge between N200 and N250 for N5,000 withdrawal, and N400 for withdrawal of N10, 000.

Similarly, to withdraw N20, 000 from the POS, the operators charge N800 and N1,600 for 40,000 respectively

Some bank officials who spoke with The Hope on condition of anonymity blamed the development on the CBN policy.

They noted that cash shortages during festive periods in Nigeria have become a familiar challenge for citizens.

“Since the introduction of the cashless policy by the apex bank of Nigeria, there has been little or no cash in circulation.

“The major cause of this problem is the apex bank. A bank cannot give what it doesn’t have. If the CBN provides a bank with nine branches only ₦25 million for a week, how can they distribute it among the branches and still service their ATMs?,” one of the bank officials queried.

The officials equally explained that most of the cash withdrawn from banks rarely return as deposits, saying instead, traders prefer to give their cash to POS agents to get instant value.

“Customers find it convenient to avoid the stress of coming to the bank, long queues, and security risks. This has significantly disrupted cash flow,” another bank official noted.

Another female banker, however, stated that no government policy restricts banks from disbursing cash to customers.

“It’s the customers who no longer deposit their cash in the bank, opting instead to sell it to POS agents. This has further contributed to the shortage of cash,” she explained.

The official also pointed out that people now hold on to cash only for essential transactions, aiming to minimise risks such as theft or robbery.

They also said, “The current economic situation does not support excessive spending, and cash shortages are one way to manage this. Government policies, like the cashless economy initiative, aim to reduce reliance on cash.”

According to the bank officials, measures such as calibrated ATMs, charges on excess withdrawals, and restrictions on OTC withdrawals are designed to manage inflation and encourage a shift to digital transactions.

A bank customer, Miss Omolayo, shared her frustrations, saying, “Cash shortages during festive seasons are extremely frustrating. Many rely on cash for shopping and celebrations, but the withdrawal limits often between ₦5,000 and ₦10,000 per transaction, are insufficient for holiday expenses.

“Multiple trips to the bank or ATM waste time and energy, especially with long queues. The government must step in to ensure banks have enough cash to meet public demand during this busy season.”

She also suggested enhancing digital payment infrastructure to reduce dependence on cash and appealed to the government to address the cash shortage urgently.

Also, another customer who identified herself as Mrs Favour narrated her ordeal: “On Monday morning, I went to the nearest ATM to withdraw cash, but only two machines were working. I waited but eventually had to leave for work.

“Later that day, I tried again, but the machines were still locked. By Wednesday evening, the situation hadn’t changed. As a nursing mother, I needed cash for groceries but couldn’t keep running to different ATMs only to find no cash.”

She criticised high POS charges and called on the government to print more money and ensure banks distribute it fairly, especially during festive periods.

“Banks should stop hoarding cash for special customers or selling it. This is December, and access to cash is already limited, and it is getting unbearable on daily basis. The government must act now,” she urged.

Mr George, a small business owner, also expressed frustration: “I rely on cash transactions, but with limited cash availability, I’m struggling to meet my customers’ demands. The withdrawal limits are crippling.”

He called on the government to increase cash supply, improve digital payment infrastructure, and enhance financial literacy to ease the burden on citizens.

Also, Mrs Lola Oluwaseun described cash shortages during festive seasons as “annoying and discouraging.” She said, “Having money in the bank but facing discomfort in accessing it is disheartening.

“Bankers sometimes sell cash to POS agents, leaving customers with no choice but to patronise them at high costs. Withdrawal limits are placed to ensure money circulates, but this often leaves people with inadequate cash for their needs.”

Meanwhile, Mr Temitope shared a different perspective: “I primarily use electronic transactions, so cash shortages rarely affect me. When I need cash, I use POS terminals or ATMs.”

However, he urged the government to reduce the stress on citizens by ensuring banks can meet cash demands during peak periods.

The customers particularly urged the CBN to take proactive steps to ease the crisis, including improved liquidity for commercial banks and robust support for electronic payment channels.

Meanwhile, as naira scarcity bite harder, the CBN has revealed that all denominations of naira banknotes currently circulation remain indefinitely valid as legal tender and cannot expire or be phased out.

A statement by Acting CBN’s Director of Corporate Communications, Mrs Sidi Ali Hakama, said all banknotes including the old and new designs of N1,000, N500 and N200 were valid.

Hakama advised the public to disregard misinformation regarding the validity of the old notes.