Cashless Policy: CBN suspends charges on large withdrawals

The Central Bank of Nigeria (CBN) has directed Deposit Money Banks to suspend charges on over-the-counter or ATM withdrawals of above N500,000 or deposit of same amount.

The apex bank’s Director, Banking and Payments System Department, Mr Dipo Fatokun, in a circular dated April 20, 2017, said all the charges introduced in February, and meant to take effect from April 1, 2017, have been dropped.

“For further clarification, the existing policy prior to the announcement of the new policy as earlier implemented in Lagos, Ogun, Kano, Abia, Anambra, Rivers states and the FCT shall remain.

“For the avoidance of doubt, the old charges to be reverted to are as follows: Individual charges on withdrawals or lodgment limit is now three per cent.

“Corporate accounts will be charged five per cent for withdrawal or lodgment of over N3 million cash.

“Henceforth, nothing will be charged as processing fees for lodgments,” he said.

Fatokun directed banks to make all necessary refunds to customers with immediate effect.

Recall that the CBN in February announced its plan to extend the Cashless Policy to all the remaining states of the Federation by Oct. 1, 2017, to enhance the efficiency of payment systems.

This policy, which received a lot of backlash from market analysts, was to commence in phases within the country with effect from April 1, 2017.

The policy introduced charges on the cumulative cash withdrawals or deposits per customer per day, irrespective of the channels used either over-the-counter or ATM.

The charges for individuals was two per cent for withdrawals above N500,000 to N5 million, 1.5 per cent on deposits for N500,000 to N1 million, and three per cent on deposits above N1 million to N5 million.

Also, individual withdrawals above N5 million was to incur a 7.5 per cent charge.

Similarly, corporate accounts were also to incur a charge of two per cent on withdrawals ranging from N3 million to N10 million, while withdrawals of that amount would be at a five per cent charge.

Over-the-counter deposit of above N10 million to N40 million was to attract a three per cent charge and 7.5 per cent on withdrawals, while above N40 million attracts five per cent on deposits and 10 per cent on withdrawals.

However, the policy exempted Revenue-Generating Accounts of the Federal, State and Local Governments, Ministries, Departments and Agencies of Government from cash deposit charge.

Also, accounts of Embassies, Diplomatic Missions, Multilateral, Aid Donor Agencies in Nigeria, Microfinance banks and Primary Mortgage Institutions were exempted from the cash deposit and withdrawal charges.