MEFFY’s NEW CASH WITHDRAWAL LIMITS POLICY

Meffy is the street code name for the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele. All statements and policies coming out from the CBN are usually attributed to Meffy who is in his second term in office as CBN governor, the 2nd person to be appointed for a second term as governor after Alhaji Abdulkadir Ahmed who served between 1982 and 1993. Meffy has been in office since 2014 and will serve till 2024, he can only leave office before the end of his term in office in the event of death, established incapability, resignation or removal from office by 2/3rd majority of the Senate. Please take your eyes off possibility of his being sacked by the president, while it can happen, the president does not have the powers according to our laws.

Meffy released a new policy on cash withdrawal limits yesterday and I thought I should break it down so that people can know how it affects them and also give my opinion on what can be done. For starters, CBN HAS NOT restricted anyone from accessing their MONEY, what CBN has done is to limit how much CASH you can take per period. Below are the new changes;

1. Cash withdrawals at the bank are now limited to N100,000.00 PER WEEK from an individual account and N500,000.00 PER WEEK from Corporate accounts. Corporate accounts include society and not for profit organisation accounts. If this limit is breached, you will be charged 5% on THE EXCESS for an indicidual and 10% for corporate. The limit before now were N500,000.00 and N3,000,000.00 PER DAY for an individual and corporate respectively, while the charges over the excess were 3% and 5% respectively.
2. Cheques issued to an individual having a value ABOVE N50,000.00 can no longer cashed over the counter, it must be paid into an account belongng to the beneficiary. If your account is in the same bank as the issuer’s bank, you have access to your money IMMEDIATELY, if you are paying it in another bank and you pay it before noon, you will have the value in your account by next working day. Note that this applies to third parties, you can issue cheques above N50,000.00 for encashment to yourself, your company cheque to yourself as a signatory or to company representative, but the weekly limits above will still apply.
3. ATM withdrawals are now limited to a maximum of N20,000.00 per day and not more than N100,000.00 in a week.
4. Only N200.00 notes will now be loaded into Automated Teller Machines (ATMs). I really feel for bank ATM custodians who will now inevitably have to do more work loading the machines, because a fully loaded machine will now only be able to take 5 times less value compared to if N1,000.00 notes were loaded.
5. Withdrawal from Point of Sales (POS) operators is now limited to a maximum of N20,000.00 in a day. This is a bit ambigous, CBN was not clear whether this applies to a single POS operator or if it is aggregated. Also, it is not clear if this is limited to ATM card usage or if transfers to the operators will be flagged by the operators’banks.
6. Lastly, CBN says if for any reasons, you want to withdraw cash above the specified limits, you can only do this ONCE in a month (subject to a limit of N5 million and N10 million for individuals and corporates respectively) and the charges would still apply. You will need to apply for approval providing your BVN, identification document and a NOTARIZED declaration of purpose (more like an affidavit). With those, you will get the approval of the Managing Director (MD) of the bank while the MD would also write to CBN for approval for it to be possible.

If you have not been needing to withdraw cash of up to N100,000.00 EVERY week, you really have no need to panic, you may not feel it other than you having to spend more time at the ATMs, before the value possible per withdrawals are now limited. Machines have capacity for ejecting between 20 and 40 notes. 20 notes of N200.00 is N4,000.00 while 40 notes is N8,000.00.

I see spraying of notes at owambe taking a hit, but at the same time saving a lot of people from being compelled to spray cash against their desire. Also, I see churches especially taking a collection hit, because people will now be compelled to conserve their cash as much as possible. There will be less of N1,000.00 and N500.00 notes in circulation since that can only be collected by entering the banking all, which will mean voluntary cash requests are now likely to attract much lower values. For churches that do dance to the isle/altar for things like thanksgiving, to prevent low collections, they will need to recaliberate, they will need to make available Quick Response (QR) codes at multiple points along the dance paths. QR codes are faster than transfers, you only need to capture the image with your smart device/phone and you can proceed. If the QR codes are pasted at multiple points, there will be less crowding and faster movements to prevent undue wastage of worshippers time in church. For churches that love to know what came in for whose thanksgiving, this would be difficult unless wellwishers send their donations to the celebrant and the celebrant sends to the church. Oh please other places of worships too should test the QR code methods, especially the E-Naira.

Bus commuting and open market transactions will also possibly take a hit. However, market traders have caliberated a long time ago, many of them have caliberated a long time ago, they take transfers already or have a POS operator within the market that their customers transfer to. Time for the rest of them to open accounts with Payment Service Banks (PSBs), the category of Paga, MoMo, 9Cash and the rest. For transport operators, the interstate operators already take transfers at the parks, the issue is with metropolis commuting. Unions like the National Union of Road Transport Workers (NURTW) will need to find a away to organise central collection systems for their buses like Lagos State is doing with cowry cards. You will only tap in and tap out your card and payment would be removed immediately. The issue here is that arbitrary fare hikes will now be difficult.

I have been told that CBN is only out to punish people and my response has been that you could only feel punished if you have been needing to withdraw cash above the limits. But have you asked if this had anything to do with vote buying? Have you asked if it had anything to do with financial terrorism perpetrated through banditry and kidnappng? These are much more greater good, governments would choose greater goods over the inconvenience for some indeviduals.

Lekan Oladele