PoS terminal operators and Femi Falana threaten to sue CBN over its cash withdrawal policy

POINT of sale terminal (PoS) operators and Lagos human rights lawyer Femi Falana have warned that they will drag the Central Bank of Nigeria (CBN) to court if it fails to rescind the new cash withdrawal policy limiting over-the-counter cash withdrawals.

On November 23, the CBN launched redesigned Nigeria's ₦‎200, ₦‎500 and ₦‎1000 banknotes, saying the naira was long overdue to wear a new look. With the introduction of the new notes, Nigerians have until January 31 2023 to hand in their old notes but is certain create a rush.

In a bid to avoid any chaos during the exercise, the CBN has issued a revised cash withdrawal policy, stating that withdrawals above N100,000 and N500,000 will henceforth attract  a 5% and 10% levy respectively. However, this move has not been universally accepted, as it has created fears that the informal economy and the retail sector which are heavily dependent on cash for their survival, will be hit hard.

Under these new restrictions, the CBN has limited over-the-counter (OTC) cash withdrawals by individuals and companies to N100,000 and N500,000, respectively, per week. Also, third-party cheques above N50,000 would no longer be eligible for OTC payment while extant limits of N10m on clearing cheques remain in place.

Bank can only load N200 and lower denominations into their ATM machines and withdrawals are restricted to N20,000 per day from ATMs and PoS terminals. This policy, which will become effective on January 9, 2023, has generated criticisms but the CBN said PoS operators could apply for waivers.

However,  Mr Falana described the new cash withdrawal limit policy initiated by the CBN as unconstitutional. As a result, he said would go ahead to sue the apex bank if its management failed to withdraw the new policy.

Mr Falana said: “ 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 CBN governor has purportedly placed a limitation on cash withdrawals in Nigeria in complete defiance of Section 2 of the Money Laundering Act, 2022."