Nigeria central bank limits withdrawals to curb use of cash

Nigeria's central bank said on Tuesday it would reduce weekly cash withdrawals for individuals to 100,000 naira ($225) from 2.5 million naira starting next month in an effort to limit the use of cash and bring more people into the banking system.

Nigeria's central bank said on Tuesday it would reduce weekly cash withdrawals for individuals to 100,000 naira ($225) from 2.5 million naira starting next month in an effort to limit the use of cash and bring more people into the banking system. A majority of Nigerians have no bank accounts and use informal markets where cash is preferred.

Authorities are also trying to stamp out the payment of ransoms to armed gangs who kidnap people and demand millions of naira in cash. The Central Bank of Nigeria (CBN) said it will next week introduce newly designed bank notes of 200, 500 and 1,000 naira and citizens have until Jan. 31 to turn in old notes when they cease to be legal tender.

Haruna Mustapha, CBN director of supervision said in a letter to banks that the new withdrawal limits would come into effect on Jan. 9 and would see corporates only allowed to withdraw up to 500,000 naira per week, down sharply from 3 million naira daily. In compelling circumstances individuals and businesses could withdraw a maximum 5 million naira and 10 million naira respectively once a month, he said.