Business
Banks succumb to CBN directive on cash availability to customers

Deposit Money Banks (DMBs) have begun implementing new withdrawal limits in compliance with a directive from the Central Bank of Nigeria (CBN) issued on December 17, 2024. The directive caps daily withdrawals on Point-of-Sale (PoS) terminals at ₦100,000 per customer, with a weekly limit of ₦500,000.
According to the CBN, these measures aim to address operational challenges, combat fraud, and establish uniform standards across the banking industry. Many banks have already informed customers via email about the new policy. A typical email stated:
“In line with CBN directives, please note that effective immediately, the daily withdrawal limit on PoS is ₦100,000, while the weekly limit is capped at ₦500,000. Our Automated Teller Machines (ATMs) are also available for your cash withdrawals. We encourage you to use alternative channels for all your transactions.”
CBN Sanctions for Non-Compliance
The enforcement of these new withdrawal limits follows recent CBN sanctions on nine banks for failing to ensure adequate cash availability during the festive season. These banks—Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc—were fined ₦1.35 billion in total, with each paying ₦150 million.
The penalties were based on spot checks by the CBN, which revealed significant non-compliance with cash distribution guidelines. The sanctions came after repeated warnings to financial institutions to ensure seamless cash availability, especially during periods of high demand.
Background on Cash Rationing
Earlier, the CBN issued a memo on November 29, 2024, directing banks to ensure efficient cash disbursement to customers both over the counter (OTC) and via ATMs. The memo also encouraged the public to report cases of cash unavailability.
However, investigations revealed that many banks in areas such as Berger, Onipanu, and Bariga failed to comply. More than 80% of banks visited had no cash in their ATMs, and OTC withdrawals were heavily rationed. Some branches allowed OTC withdrawals of just ₦20,000 per customer, while ATMs dispensed no cash at all.
A bank staff member, speaking anonymously, attributed the cash rationing to shortages in cash supply, noting that customers could withdraw up to ₦50,000 OTC only on “good days.”
Impact on PoS Operators and Customers
The cash rationing has significantly impacted PoS operators. Transaction charges have risen sharply, with service fees increasing by 50% to 100%. For instance, withdrawals of ₦5,000 now attract charges of ₦200, up from ₦100 previously. This spike is partly due to new fees imposed by the CBN on PoS transactions, as well as rising operational costs.
A PoS operator, known as Mama B, expressed frustration over the withdrawal limits and higher charges, describing the situation as unsustainable. Another operator, Mirabel Olumide, noted additional fees of ₦50 per transaction based on withdrawal amounts, further compounding customers’ difficulties.
Call for Improved Monitoring
Economic analysts have called on the CBN to strengthen its oversight of cash distribution. Stephen Kanabe, a renowned economic analyst, urged the CBN to invest in digital tools for monitoring cash flows and detecting non-compliance.
“Advanced analytics can help identify patterns of cash hoarding or unauthorized deductions. The CBN should also collaborate with law enforcement to address illegal cash sales and other operational violations,” Kanabe advised.
History of Banking Sector Malpractices
The Nigerian banking sector has a history of regulatory breaches and unethical practices. Reports indicate that some banks deliberately hoard cash, diverting it to unauthorized channels and selling it at exorbitant rates.
In response to complaints, the CBN recovered over ₦7.05 billion and $714,569 from banks between January and August 2024. These funds were restituted to customers following unauthorized deductions, delayed reversals of failed transactions, and hidden charges.
The CBN’s new directive aims to curb these practices, ensure equitable cash distribution, and promote greater transparency across the banking sector. However, close monitoring and stricter enforcement remain crucial to achieving these goals.