Authorities hope the policy, which takes effect on January 9, will help bring an end to the country's kidnapping epidemic by making it harder for criminals to collect cash ransom.
Criminals are likely to be hit hard by the new regulations, including kidnappers, whose victims' ransom payments will now have to go through official channels, thus making it harder to circumvent authorities.
According to Nigeria's Premium Times, a report found kidnappers collected 650 million nairas (US$1.46 million) between July 2021 and June 2022 alone. The total amount demanded was over 6.5 billion.
During that period, 500 incidents of kidnapping were reported, involving nearly 3,500 people. Over 500 others were killed in kidnapping-related incidents.
As Bloomberg reports, the CBN noted that aside from dissuading criminals, the goal of the changes was to encourage Nigerians to "use alternative channels—Internet banking, mobile banking apps, USSD, cards, POS, eNaira to conduct their banking transactions."
Recent data shows 85 percent of cash in Nigeria exists outside financial institutions, with 40 million adults in the country doing business without a bank account.
"The maximum cash withdrawal over the counter by individuals and corporate organizers per week shall henceforth be 100,000 and 500,000 naira, respectively," the CBN wrote in a statement, noting that any withdrawals above that limit would be subject to fees of 5 or 10 percent.
ATMs will only be stocked with denominations of 200 nairas and below, and withdrawals will be limited to 20,000 nairas per day with a maximum of 100,000 per week. Point of Sale withdrawals will similarly be limited to 20,000 nairas per day.
The CBN went on to explain that individuals and corporations would be permitted to withdraw 5 million and 10 million nairas, respectively, under "compelling circumstances."
Such cases would only be allowed once per month and would require the drawee to upload a host of personal details to a portal on the CBN's website, including approval in writing from the CEO of the bank authorizing the withdrawal.
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