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Banks enforce PoS withdrawal limits amid CBN directive to curb fraud

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Banks across Nigeria have begun enforcing new daily and weekly withdrawal limits on Point-of-Sale (PoS) terminals following a directive from the Central Bank of Nigeria (CBN).

The policy, announced on December 17, 2024, sets a daily withdrawal cap of N100,000 and a weekly limit of N500,000.

The CBN stated that the move is aimed at addressing operational inefficiencies, curbing financial fraud, and standardising banking practices nationwide.

In compliance with the directive, Union Bank informed its customers of the new limits. The bank stated, “In line with CBN directives, please note that effective immediately, the daily withdrawal limit on PoS is now N100,000, while the weekly limit is fixed at N500,000.

“Our Automated Teller Machines (ATMs) are also available for your cash withdrawals. We encourage you to use our alternative channels (UnionMobile, *826#, UnionOnline) for all your transactions.”

Other financial institutions have also started notifying customers of the changes, encouraging them to adopt alternative banking channels to minimise reliance on physical cash.

This policy follows the CBN’s recent sanctions on nine Deposit Money Banks (DMBs) for failing to maintain adequate cash availability at their Automated Teller Machines (ATMs) during the festive period.

Each bank was fined N150 million for non-compliance with the central bank’s cash distribution guidelines. The fines were imposed after the CBN conducted spot checks on branches across the country.

CBN officials have defended these measures, stating that they are part of broader reforms to ensure better access to cash, improve financial system efficiency, and combat financial crimes, particularly at PoS terminals.

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The implementation of withdrawal limits has sparked mixed reactions among Nigerians and industry stakeholders. While some view the policy as necessary to promote the use of alternative banking channels and reduce dependency on cash, others have raised concerns about its impact on small businesses that rely heavily on PoS transactions.

Dr. Emmanuel Eze, an economist and banking policy analyst, believes the CBN’s directive is a step in the right direction but urges the central bank to monitor its implementation closely.

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“The limits will encourage the adoption of digital payments, which is crucial for financial inclusion and curbing fraud. However, the CBN needs to ensure that banks invest in infrastructure to support alternative payment systems,” he said.

On the other hand, small business owners and operators of PoS terminals have expressed worry over the limits, citing the potential for reduced transaction volumes and revenue.

“Many of our customers depend on PoS transactions for quick cash access, especially in rural areas with limited banking infrastructure. This policy could hurt our businesses and force people back to cash hoarding,” said Adebayo Oladimeji, a PoS agent in Lagos.

The CBN has maintained that the policy is in line with its long-term goal of achieving a cashless economy. It also assured the public that alternative banking channels, including mobile banking apps, USSD codes, and online banking platforms, are robust enough to handle increased usage.

“The implementation of these limits will not only curb fraud but also align with global best practices in financial transactions. Nigerians are encouraged to explore digital channels for their banking needs,” a CBN spokesperson said.

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