Nigerian banks peg ATM withdrawals at N20,000

As the 31 January deadline approaches, commercial banks in Nigeria are beginning to ration the newly designed naira notes. The Central Bank of Nigeria (CBN) announced the redesign of the N200, N500 and N1,000 notes last October and officially launched them in November. Nigerians were given until 31 January to deposit all old notes, which will cease to be legal tender. The CBN stated that the rationale behind this was to curb counterfeiting and reduce the large amount of money outside the banking system, which is estimated to be around 80%.

However, reports suggest that the newly redesigned notes have remained scarce, and banks are giving customers old notes over the counter while claiming that the new notes are being dispensed at ATM machines. A leaked internal memo from First Bank stated that ATM withdrawals have now been limited to N20,000 per day from the initial N120,000. Customers holding ATM cards of other banks would only be allowed to withdraw N5,000 from First Bank ATM machines.

Despite calls from Nigeria’s parliament for the deadline to be extended, President Muhammadu Buhari and CBN Governor, Godwin Emefiele, have been adamant that the deadline will not be extended. Buhari stated that he wants to ensure that politicians do not use stolen funds to buy votes. Emefiele has also vowed to sanction banks that are hoarding the new notes.

However, some experts argue that the government should not put Nigerians through hardship just because it wants to tackle vote buying. The rationing of the new notes and the withdrawal limits at ATM machines may cause inconvenience and financial difficulties for many citizens.