Banks Set New ATM Withdrawal Limits Below CBN’s Provision

Nigerian commercial banks have recently imposed withdrawal limits on their automated teller machines (ATMs), deviating from the Central Bank of Nigeria’s (CBN) directives.

Following instances of cash scarcity reported in various regions during the latter part of last year, banks have taken measures to regulate cash withdrawals. The scarcity was attributed to a surge in withdrawals from bank branches and ATMs, as well as panic withdrawals by customers, as stated by the CBN on November 2, 2023.

Despite assurances from the CBN regarding the adequacy of currency notes and efforts to ensure smooth cash circulation, banks have initiated their own measures. This move comes after the CBN’s attempt to encourage cashless transactions by implementing withdrawal caps in December 2022.

While the CBN initially set daily withdrawal limits at N20,000 and weekly limits at N100,000 for individuals, these restrictions were later revised to N500,000 and N5,000,000 per week for individuals and corporate organizations, respectively, in response to public outcry.

However, recent investigations reveal that many banks have reintroduced lower withdrawal limits on their ATMs. These limits vary among banks and affect both account holders and non-customers attempting to withdraw cash.

For instance, at several branches of Guaranty Trust Bank (GTB) in Lagos state, account holders can’t only withdraw between N20,000 and N50,000 per day, with non-customers facing even stricter limits.

Similar restrictions are observed across other banks, such as Polaris Bank, United Bank for Africa (UBA), Union Bank, Ecobank, Keystone Bank, Zenith Bank, First City Monument Bank (FCMB), Sterling Bank, Access Bank, Fidelity Bank, First Bank of Nigeria (FBN), Globus Bank, Providus Bank, Premium Trust Bank, Unity Bank, Parallex Bank, Heritage Bank, Suntrust Bank, Titan Trust Bank, and Wema Bank.

The rationale behind these limits, as explained by Stanbic IBTC Bank, is to prevent cash shortages caused by individuals using multiple cards from different banks in a single ATM transaction. According to a banking industry official, the rise of financial technology (Fintechs) firms has exacerbated this issue, with some fintech customers withdrawing large sums from bank ATMs.

In response, banks have emphasized the need to prioritize their own customers’ cash needs, while also acknowledging the CBN’s directive on maximum weekly withdrawal limits.

Despite these measures, the observed withdrawal restrictions appear to contravene the CBN’s directives. When contacted for clarification, the CBN’s acting director of corporate communications requested further information for investigation but has not provided a response to date.