In a major policy shift, the nation’s apex bank, Central Bank of Nigeria (CBN), has introduced a new set of cash management rules. The policy took effect on January 1, 2026.
According to the provisions of the policy, the old deposit limits and the frustrating deposit fees have been abolished in a move that makes it possible for bank customers to now deposit any amount of cash at no charge. This is actually a positive change that makes banking more convenient.
In the same direction, the new policy sets a new cumulative weekly cash withdrawal limit of ₦500,000 for individuals and ₦5 million for businesses. Similarly, it demands that withdrawals above those limits would require the payment of excess withdrawal fees (three per cent for individuals, five per cent for businesses)
The policy also places automated teller machine (ATM) withdrawals at ₦100,000 per day and ₦500,000 per week. In the same vein, third-party cheques above ₦100,000 can no longer be cashed over the counter though they can still be deposited into accounts. The CBN, in this new policy, requires banks to report all large withdrawals to it monthly
Other provisions of the policy permits banks to keep 60 per cent of excess withdrawal fees, while CBN takes 40 per cent. The implication is that banks garner profit when customers exceed withdrawal limits.
Also only government accounts and microfinance institutions are exempt as previous exemptions for embassies, diplomatic missions, and aid donor agencies have been removed
What this entails is that cash withdrawals are now more restricted, and withdrawing above the limits will cost more. However, deposits are now completely free.
It must be understood that this is not the CBN’s first attempt to manage cash usage. The process has been on since 2011 as the apex bank continues to push for a cashless economy through various policies. This new circular, however, supersedes other previous policies and represents its most comprehensive effort yet.
The intention of the policy according to experts, are to reduce the cost of cash management (printing, transporting, and securing physical currency; address security concerns around large cash movements; reduce opportunities for money laundering and encourage adoption of digital payment systems.
It is pertinent to stress that the CBN is not trying to eliminate cash, but it is deliberately making large cash transactions more expensive so as to shift behaviour toward digital alternatives.
For those thinking of playing smart, the limit is cumulative. It doesn’t matter if one withdraws from multiple banks or multiple accounts. The CBN tracks withdrawals per individual across the banking system. The same goes for Businesses (Corporate Accounts)
By the provisions of the policy, ATM withdrawals have their own daily limit (₦100,000 per day), but these withdrawals count toward one’s weekly ₦500,000 total.
What this means is that if one withdraws ₦100,000 from an ATM every day for five days, one may have used one’s entire weekly limit. Any additional cash withdrawal that week, whether from an ATM, POS, or over the counter, will trigger the three per cent excess fee.
The impact of this policy on bank service consumers is dependent on how much one relies on cash.:
What is obvious, however, going by the provisions of this policy, is that more people will depend on transfers and digital payments; ATM availability may feel tighter; charges can add up quickly if one relied on frequent cash withdrawals; small businesses that operate mostly in cash will need to adjust; planning becomes more important and large one-time expenses require planning.
Sio far, the focus has been on restrictions even as a lot remains the same or actually may have improved: Among them include the reality that deposits are now completely free (previously there were deposit limits and fees); bank transfers remain free and unlimited – no restrictions on digital transfers; POS payments remain unaffected – paying merchants via POS doesn’t count toward withdrawal limits; online/mobile banking remains the same – bill payments, subscriptions, and digital transactions are unchanged and cash is still legal tender – you can use it for any transaction; you just face limits on withdrawing large amounts.
Experts are positive that excess withdrawal fees of 3–5 per cent are avoidable if bank customers reduce reliance on physical cash while using bank transfers, POS, or online payments wherever possible; spread their cash withdrawals across weeks; use digital wallets or bank transfers for recurring expenses such as school fees, rent, subscriptions, utility bills, pay these digitally instead of withdrawing cash to pay them. Most schools, landlords, and service providers now accept transfers and keep emergency fund digital. Emergencies often force large, sudden withdrawals, which now attract fees. If your emergency fund is in a savings account or investment that allows quick transfers, you can move money digitally without hitting withdrawal limits.
They also advise that suppliers and vendors be paid via transfer; consider splitting payment method. If one needs ₦1 million for a transaction, you might withdraw ₦500,000 (avoiding fees) and arrange a bank transfer for the remaining ₦500,000 just as they must understand that splitting across accounts doesn’t help. The CBN tracks withdrawals per individual across all banks. Withdrawing ₦300,000 from Bank A and ₦300,000 from Bank B in the same week still totals ₦600,000, triggering fees on the ₦100,000 excess.
In the prevailing circumstance, it is advisable to deploy digital financial tools. It helps if one organised spending money digitally: Hold daily funds in digital wallets or savings accounts; plan big expenses; automate cash flow: schedule regular savings to avoid last-minute withdrawals; rely less on ATMs: Keep money accessible digitally without hitting withdrawal caps; build better habits: Nigeria is shifting toward digital finance; adapting early helps avoid inconveniencing charges.
With this new policy, Nigerians have a lot to expect and hope for. For certain, CBN is not trying to ban cash. Cash remains legal tender and will continue to be available. However, the CBN is deliberately making large cash transactions more expensive to encourage digital payments, which are cheaper to manage, more transparent, and harder to use for money laundering. This is part of a global trend toward cashless economies
Furthermore, cash will continue to be available, but controlled: Digital payments will keep growing: They’re the cheaper, easier alternative for most transactions; businesses and individuals who adjust early will avoid unnecessary fees: Those who resist change will pay thousands or even millions in excess withdrawal fees; financial planning will matter more than ever: Tools that help you manage money digitally will become essential: Whether it’s your bank’s mobile app, a digital wallet, or investment platforms, comfort with digital money management is no longer optional.
Nigeria isn’t eliminating cash, but the direction is clear: using large amounts of cash will now come with limits and, often, extra costs.
~ Gilberts is a consultant with Magnificat Synergy Nig Ltd.
