CBN Exempts Microfinance, Primary Mortgage Banks from Cash Withdrawal Limits

The Central Bank of Nigeria (CBN) has exempted microfinance banks (MFBs) and primary mortgage banks (PMBs) from paying processing fees for withdrawals above the cash withdrawal limits.

This development was communicated in a circular issued on Monday by Musa Jimoh, the director of the payments system management department.

The circular states, “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 fees for withdrawals above the cash withdrawal limits for direct cash withdrawals from their correspondent banks,” the circular reads.

“This is to enable them to continue to play their expected roles in the economy and provide specialised retail banking services to their customers.

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“Please, note that the microfinance and primary mortgage banks are required to fully comply with the cash withdrawal limits in serving their customers as per the circular with reference number BSD/DIR/PUB/LAB/015/073 dated December 21, 2022.

“Please be guided accordingly.”

In December 2022, the CBN issued a directive to deposit money banks and other financial institutions to restrict over-the-counter cash withdrawals by individuals and corporate entities to N100,000 and N500,000 per week, respectively.

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Following mixed reactions from Nigerians, the apex bank raised the maximum weekly limit for cash withdrawals across all channels to N500,000 for individuals and N5 million for corporate organizations.

However, in cases where legitimate purposes require cash withdrawals above the specified limit, a processing fee of 3 percent and 5 percent will be charged for individuals and corporate organizations, respectively.

The primary goal of implementing this cash withdrawal policy is to bolster the cashless policy and reduce the amount of cash circulating outside the formal banking system.

The cash withdrawal policy came into effect on January 9, 2023.