The Central Bank of Nigeria’s new cash withdrawal policy, which limits over-the-counter cash withdrawals by individuals and businesses to N100,000 and N500,000, respectively, per week, has been met with threats of legal action from point of sale terminal operators and Femi Falana, a human rights attorney in Lagos.
Third-party cheques for more than N50,000 would no longer be eligible for OTC payment, according to the CBN’s memo establishing the policy, but current clearing cheque limits of N10 million would still apply.
The circular further instructed banks to limit ATM withdrawals to N20,000 per day and to only load N200 and lesser denominations into their ATM with the daily maximum for withdrawals from PoS terminals being N20,000.
The CBN clarified last Wednesday that PoS operators could apply for waivers. The policy, which will go into effect on January 9, 2023, had drawn criticism.
Falana, however, deemed the new cash withdrawal limit regulation implemented by the CBN unlawful on Monday.
He declared that if the apex bank’s management did not reverse the new policy, he would go ahead and sue it.
Falana requested that President Major General Muhammadu Buhari (ret. ), in a statement headlined “Maximum withdrawal limit in Nigeria is N5m,” order the apex bank to remove the “illegal guideline.”
In his opinion, “It is embarrassing that the Central Bank of Nigeria has been making announcements without any regard to the Constitution and other relevant laws on the national economy. It is particularly worrisome that the Governor of the Central Bank of Nigeria has purportedly placed a limitation on cash withdrawals in Nigeria in complete defiance of section 2 of the Money Laundering Act, 2022 which provides as follows:
“No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding (a)5,000,000 or its equivalent, in the case of an individual; or (b) N10,000,000 or its equivalent, in the case of a body corporate.
“A person shall not conduct two or more transactions separately with one or more financial institutions or designated non-financial businesses and professions with intent to (a) avoid the duty to report a transaction which should be reported under this Act ; and (b) breach the duty to disclose information under this act by any other means.
“Since the Money Laundering Act 2022 (which has fixed maximum cash withdrawal to N5 million) has not been amended, the limitation of cash withdrawal of not more than N20,000 per day and N100,000 per week fixed by the Central Bank of Nigeria is illegal, null and void in every material. We urge the Nigerian people to ignore the illegal announcement.
“However, we are compelled to call on President Muhammadu Buhari to direct the management of the CBN to withdraw the illegal guideline and stop announcing more policies that are designed to sentence poor citizens to more excruciating economic hardship”.
Gbajabiamila
The controversial policy, which the Central Bank of Nigeria recently enacted and which, among other things, places restrictions on cash withdrawals at deposit money banks and other financial institutions, has been criticized once more by the Speaker of the House of Representatives, Femi Gbajabiamila.
Last Thursday, the House urged the CBN to delay implementing the policy until the legislators’ investigations were complete.
As a result, the House had invited Godwin Emefiele, the Governor of the Central Bank of Nigeria, to come and present the policy before the legislature. On Thursday, he is scheduled to appear before the MPs.
In his speech at the second installment of the Distinguished Parliamentarians Lecture Series, which was held on Monday in Abuja and sponsored by the National Institute for Legislative and Democratic Studies, Gbajabiamila shared his opinions.
He said, “Recently, the Central Bank of Nigeria announced a policy to redesign the Nigerian Naira and impose restrictions on cash transactions across the economy. The National Assembly has been inundated with petitions from citizens worried about the impact of the new policies on their businesses and concerned that the policy approach will not deliver its stated policy objectives. Many have pointed to the fact that in India where a similar policy was implemented beginning in 2016, the expected benefits haven’t materialised, yet there has been a pronounced contraction in the economy probably linked to the policy.
“Now, whatever the concerns about the policy may be, it should not be the normal course of things for such a profoundly impactful policy programme to be designed, approved and announced without any engagement with the legislature, or any attempt to seek the perspectives of the people’s representatives. Keep in mind, these are the very same people who will have to explain and answer for these policies in communities across the country.
“While each arm of government has its prerogatives and guards them jealously, our country cannot afford actions that set the stage for the competing objectives of different arms of government to descend into governance dysfunction and paralysing conflict.”
PoS Operators
In order to represent themselves in the intended lawsuit against the CBN, PoS operators, acting through the Association of Mobile Money and Bank Agents of Nigeria, have stated that if the regulator does not overturn the decision, they will hire Falana’s chambers.
The PoS agents, through the association’s attorney, Douglas Okojie, had finished arrangements to file a lawsuit against the development, according to Victor Olojo, the association’s national president, who spoke exclusively with some journalists.
He said, “The first option is to write to Falana to represent AMMBAN in the legal action about to be initiated. While the second option is to get another lawyer to apply to the court, maybe after the suit has been filed, and make AMMBAN an interested party in the suit.”
Conclusively, Olojo pleaded with the CBN to pay attention to the complaints of bank and mobile money agents as well as Nigerians in general.
