CBN Exempts PMBs, MFBs from Cash Withdrawal Limits 

•Senate will amend apex bank’s Act, Akpabio reveals

James Emejo and Sunday Aborisade in Abuja

The Central Bank of Nigeria (CBN) yesterday approved the exemption of Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs) from paying processing fees for withdrawals above the cash withdrawal limits for direct cash withdrawals from their correspondent banks.

The central bank said the move was in recognition of the banking services which these institutions provide to the economically active poor. 

The directive was conveyed in a circulated dated July 31, 2023 and signed by CBN Director, Payments System Management Department, Mr. Musa Jimoh, which was addressed to banks and Other Financial Institutions (OFIs). 

The apex bank also added that the gesture was to enable the PMBs and MFBs continue to play their expected roles in the economy and provide specialised retail banking services to their customers.

The CBN however, mandated the PMBs and MFBs to comply fully with the cash withdrawal limits in serving their customers regarding an earlier circular with reference number BSD/DIR/PUB/LAB/015/073 dated December 21, 2022.

In that circular, the apex bank directed banks and OFIs to ensure that over-the-counter cash withdrawals by individuals and corporate entities per week do not exceed N100,000 and N500, 000, respectively.

The policy took effect nationwide from January 9, 2023 and all cash withdrawals in excess of the stated limits attracts processing fees of five percent and 10 percent, respectively.

The CBN stated, “Further to the launch of the redesigned naira notes by the president of the federal republic of Nigeria, on Wednesday, November 23, 2022 and in line with the cash-less policy of the CBN, all deposit money banks (DMBs) and other financial institutions (OFls) are hereby directed to note and comply with the following.”

It stated that the “maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week shall henceforth be N100,000 and N500,000, respectively. 

“Withdrawals above these limits shall attract processing fees of 5 percent and 10 percent, respectively.”

“Third party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.

“The maximum cash withdrawal per week via automated teller machine (ATM) shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.”

Meanwhile, the Senate President, Godswill Akpabio, has said the upper legislative chamber would soon initiate moves to amend the Act which established the CBN.

Akpabio, stated this during the screening of the ministerial nominee from Oyo State, Adedayo Adelabu, a former deputy governor of the CBN.

Adelabu, had during the screening told the lawmakers that the apex financial institution was not being monitored by any external body which has the statutory responsibility to oversee its affairs.

Akpabio said, ” Adelabu has pointed out that there was no proper monitoring of the CBN. He also said there was no statutory meeting that involved the accountant general of the federation, the CBN Governor, the Budget planning division and the four deputy governors. 

“Even once in a year. He said throughout the five years of serving, nothing like that. He also pointed out that there was nobody that is supervising the apex financial institution. Whatever decision they take; they have nobody to report to. 

“This is a food for thought for distinguished senators. That means that we must revisit the Act that set up the CBN because most of the problems we are seeing cannot be answered by the nominee (Adelabu). We won’t be where we are now,” Akpabio said.

Adelabu had said, “The CBN has never been in competition with the federal government because it is an economic arm of executive.

“It oversees the monetary policy functions of the FG. The second arm is the Ministry of Finance, Budget, OAGF, that oversees the fiscal policy arm

 “Technically, I don’t really see anything wrong with the structure of the CBN.

“The only issue is around the governance structure of supervising the CBN. I want to say that power corrupt and absolute power corrupt absolutely. 

“There are three highest decision-making bodies in the CBN. They are: The committee on governance, monetary policy committee and the board of directors. 

“The CBN Governor is the Chairman of the three committees which is good. There is nothing bad in it because all over the World, the independence of the CBN must be guaranteed. 

“However the Governor is just the first among the equals. There are five governors in the CBN. 

“A Governor and four deputy governors. We must ensure that each of the deputy governors is independent of the Governor so that they are not subservient to the Governor. 

“The liberty line is the Governor to the Presidency. Once in six months, the five governors should meet with Mr. President and take certain decisions. There is always minority opinion. 

“The economic management team of the nation which comprised finance minister, the budget and national planning, the CBN Governor, the Accountant General of the Federation and some other relevant ministries must have some subtle oversight in terms of interrogating a lot of decisions of the CBN.

“If the CBN knows that it will report to a body in terms of the companies and individuals they allocated foreign exchange to, and how they arrive at exchange rate, there would be caution.”