In a significant reversal of one of its most controversial monetary policies, the Central Bank of Nigeria (CBN) has officially removed the cap on cash deposits and raised the weekly cash withdrawal limit across all channels from ₦100,000 to ₦500,000. The new directive, which takes immediate effect, represents a major shift in Nigeria’s cash control framework and signals a recalibration of the apex bank’s approach to financial inclusion, liquidity management, and the realities of a largely cash-driven economy.
The policy change, contained in a fresh circular issued to deposit money banks and other financial institutions, effectively ends restrictions on how much cash individuals and businesses can deposit into their accounts while significantly easing weekly withdrawal limits that had been widely criticized as too restrictive for ordinary Nigerians and small businesses.
This development comes after months of pressure from the public, organized private sector, financial analysts, and lawmakers, many of whom argued that the earlier ₦100,000 weekly withdrawal ceiling imposed unnecessary hardship on low-income earners, traders, artisans, transport operators, and cash-reliant sectors of the economy.
Background: The Policy Nigerians Resisted
The cash withdrawal and deposit limits were originally introduced as part of the Central Bank’s broader cashless economy initiative, alongside the redesign of the naira notes. Under the earlier framework, individuals were permitted to withdraw only ₦100,000 per week, while corporate bodies faced a limit of ₦500,000. Any withdrawals above these thresholds attracted hefty charges.
At the time, the CBN argued that the restrictions would reduce the cost of cash management, curb corruption, tackle kidnapping and ransom payments, and drive the adoption of digital payments nationwide. However, in practice, the policy triggered widespread cash scarcity, disrupted commercial activities, slowed down informal sector transactions, and fueled public anger across the country.
Small business owners complained that the limits made it difficult to restock goods, pay suppliers, and meet daily operational expenses. Market traders, transport workers, rural dwellers, and the unbanked population were hit the hardest. The constraints also resulted in increased reliance on Point-of-Sale (POS) operators, many of whom charged excessive fees due to cash scarcity.
The backlash forced several adjustments over time, but critics argued that the core restrictions remained too tight for an economy where a large percentage of transactions are still conducted in cash.
What Has Changed Under the New CBN Directive
Under the newly announced policy, the Central Bank has now:
- Removed the limit on cash deposits into bank accounts. Individuals and businesses can now deposit any amount of cash without a regulatory ceiling.
- Increased the weekly withdrawal limit for individuals from ₦100,000 to ₦500,000 across all channels.
- Retained differentiated limits for corporate accounts, with significantly higher thresholds than those previously in place.
- Maintained daily ATM withdrawal limits, but now under a revised weekly framework aligned with the new ₦500,000 cap.
- Abolished special permissions that previously allowed occasional large withdrawals through special approvals.
The move is designed to strike a balance between easing economic pressures and still encouraging digital financial transactions in line with Nigeria’s long-term cashless policy goals.
CBN’s Rationale for the Policy Shift
According to the apex bank, the new measures were introduced after extensive consultations with key stakeholders across the banking industry, business community, and security agencies. The CBN acknowledged the operational challenges and unintended consequences of the earlier restrictions, particularly on the informal sector, which accounts for a substantial portion of Nigeria’s economic activity.
The bank noted that while a cashless economy remains a strategic objective, the transition must be gradual, inclusive, and sensitive to prevailing socio-economic realities, especially in rural areas and among low-income earners who still rely almost entirely on physical cash.
The CBN also reaffirmed its commitment to tackle money laundering, terrorism financing, and other financial crimes through improved surveillance, enhanced reporting systems, and stronger Know-Your-Customer (KYC) enforcement, rather than blanket cash restrictions that punish legitimate users.
Relief for Small Businesses and the Informal Sector
The removal of the cash deposit ceiling and the fivefold increase in the withdrawal limit have been widely welcomed by small and medium-scale enterprises (SMEs), traders, and informal sector operators across the country.
Market women, shop owners, transport unions, artisans, and food vendors who operate largely on cash transactions say the new policy will restore liquidity to daily business operations, reduce their dependence on expensive POS services, and improve cash flow.
For many operators, the old ₦100,000 weekly cap was unrealistic. Some businesses require that amount or more in a single day to pay suppliers, transport goods, or restock shops. The new ₦500,000 limit is seen as more practical, although some stakeholders still argue that it may not be sufficient for certain categories of businesses.
Financial inclusion advocates also believe the policy adjustment will help rebuild trust in the banking system, which suffered a major blow during the cash scarcity crisis. Many Nigerians had resorted to hoarding cash due to fears of being unable to access their own money when needed.
Implications for Banks and the Financial System
For deposit money banks, the lifting of deposit limits is expected to increase liquidity within the formal financial system. During the height of the restrictions, many customers chose to keep large sums outside the banks, limiting the ability of financial institutions to intermediate funds for lending and investment.
With the new directive, banks are likely to see a rise in cash deposits from traders, transport unions, retail businesses, and other cash-intensive sectors. This could, in turn, improve their lending capacity to the private sector, especially small businesses struggling to access credit.
However, banks will also face renewed responsibilities in terms of cash management, security, and compliance with anti-money laundering regulations. The CBN is expected to intensify monitoring to ensure that the relaxed rules do not lead to abuse.
Impact on Digital Payments and the Cashless Policy
Analysts say the policy change does not signal an end to Nigeria’s cashless drive but rather reflects a more pragmatic approach to its implementation. While electronic transactions have grown significantly through mobile banking, transfers, and POS payments, the reality remains that a large portion of Nigerians still operate outside the digital ecosystem.
In many rural communities, erratic electricity, poor network coverage, limited smartphone penetration, and digital illiteracy continue to undermine the full adoption of cashless systems. For such populations, physical cash remains the only reliable medium of exchange.
The new CBN stance appears to acknowledge these limitations while still encouraging electronic payments through incentives, improved infrastructure, and gradual behavioral change rather than coercive restrictions.
Security, Crime, and Cash in Circulation
One of the original justifications for cash withdrawal limits was the need to reduce kidnapping, armed robbery, and other cash-driven crimes. However, security experts have maintained that criminal activity is driven more by systemic insecurity and weak law enforcement than by access to cash alone.
With the new limits, concerns have been raised about whether increased cash circulation could lead to a rise in criminal activity. The CBN and security agencies insist that modern financial intelligence tools, surveillance systems, and inter-agency collaboration are now stronger than before and can mitigate such risks without penalizing legitimate economic activities.
Public Reaction: Cautious Optimism
Across social media, markets, and business circles, the announcement has been met with a mix of relief and cautious optimism. Many Nigerians see the new limit as a long-overdue correction of a flawed policy that disconnected regulators from economic realities on the ground.
Civil society groups have also urged the CBN to back the new directive with consistent implementation and clear communication to prevent confusion at bank branches, where policy inconsistencies often create bottlenecks for customers.
Some analysts, however, warn that raising the withdrawal limit alone is not enough to resolve Nigeria’s cash challenges. They argue that currency supply, ATM availability, network reliability, and banking infrastructure must improve simultaneously to ensure seamless access to funds nationwide.
What This Means for Ordinary Nigerians
For salary earners, traders, farmers, students, and small business owners, the implications are immediate:
- Individuals can now withdraw up to ₦500,000 weekly instead of ₦100,000, easing daily financial planning.
- There is no longer a cap on how much cash can be deposited, eliminating the fear of being unable to lodge large sums into bank accounts.
- Dependence on POS operators for cash access is likely to reduce, potentially lowering transaction costs for consumers.
- Businesses can better manage payroll, supplier payments, and emergency expenses.
However, customers are still expected to comply with bank documentation requirements and regulatory checks, especially for large cash transactions, in line with existing financial crime prevention laws.
A Turning Point in Nigeria’s Monetary Policy?
The latest policy shift signals what many observers describe as a more responsive and consultative approach by the Central Bank of Nigeria. After months of economic disruption, public outcry, and operational challenges, the apex bank appears to have taken feedback seriously and adjusted its strategy accordingly.
Whether this will fully restore public confidence in the banking system remains to be seen. Much will depend on consistent enforcement, transparency, and the ability of banks to deliver efficient services without arbitrary restrictions or hidden charges.
What is clear, however, is that the removal of cash deposit limits and the increase in weekly withdrawal thresholds mark a significant turning point in Nigeria’s evolving cashless policy framework—one that acknowledges both the promise of digital finance and the enduring realities of a cash-dependent economy.
As Nigerians adapt to the new rules, stakeholders across the financial ecosystem will be watching closely to see whether this shift delivers the intended balance between economic freedom, financial security, and technological progress.
