Nigeria Hikes Cash Takeouts

FILE: Nigerian naira banknotes are seen in this picture illustration, September 10, 2018. Taken September 10, 2018

Nigeria's central bank on Wednesday substantially increased limits it had set on weekly cash withdrawals as part of an effort to curb the use of cash.

Individuals will be allowed to withdraw up to 500,000 naira ($1,120) weekly, up from a 100,000 limit set on Dec. 6. Corporates will be allowed to withdraw 5 million naira weekly, up from a 500,000 naira limit.

In compelling circumstances when individuals or businesses need to make withdrawals above the limits, the requests will incur a processing fee of 3% and 5%, respectively. Previously, even in compelling circumstances limits were set at 5 million naira and 10 million naira respectively.

"The CBN recognises the vital role that cash plays in supporting underserved and rural communities and will ensure an inclusive approach as it implements the transition to a more cashless society," Haruna Mustapha, CBN director of supervision, said in the circular announcing the revised limits.

Last week, the central bank also started circulating redesigned 200, 500 and 1,000 naira notes under a plan to curb double-digit inflation and move towards a cashless economy. Citizens have until Jan. 31 to turn in old notes, when they cease to be legal tender.

A majority of Nigerians have no bank accounts and use informal markets, where cash is preferred, and some said the withdrawal limits could hurt some citizens and businesses.