The Central Bank of Nigeria (CBN) has announced major changes to its cash-handling regulations, scrapping the ceiling on cash deposits and raising the weekly withdrawal limit across all platforms to N500,000, a significant increase from the previous N100,000 limit. The move, which takes effect from January 1, 2026, marks a major shift in the apex bank’s efforts to manage the country’s cash-driven economy.
The policy change was communicated in a circular titled “Revised Cash-Related Policies”, endorsed by Dr. Rita Sike, Director of the Financial Policy & Regulation Department. The circular was sent to all financial institutions and outlines a comprehensive overhaul of deposit and withdrawal regulations.
According to the CBN, the changes are part of broader efforts to reduce the costs of handling physical cash, improve security in cash transactions, and address vulnerabilities related to money laundering in Nigeria’s largely cash-based economy.
Earlier cash directives from the CBN were designed to push Nigerians toward electronic payment options, reduce cash circulation, and curb associated risks. However, the central bank said a review was necessary to align regulations with current economic realities and evolving customer needs.
Under the new framework, the cap on cumulative cash deposits has been removed, and additional charges previously applied when exceeding deposit limits have been abolished.
At the same time, the bank introduced new cumulative withdrawal ceilings:
Individuals: N500,000 per week
Corporate entities: N5 million per week
Amounts above these limits will incur excess withdrawal fees as outlined in the circular. The earlier monthly special approval, which allowed individuals to withdraw N5 million and corporates N10 million once a month, has now been discontinued.
For ATM transactions, customers remain limited to N100,000 per day, with a total weekly cap of N500,000, which counts toward the overall weekly withdrawal limit across ATMs, POS devices, and other channels.
Excess withdrawals will attract charges of 3% for individuals and 5% for organisations. These charges will be split, with 40% going to the CBN and 60% to the servicing bank or financial institution.
Banks have also been directed to ensure ATMs are stocked with all available currency denominations to meet the higher withdrawal demands and avoid cash shortages. Meanwhile, the ceiling on over-the-counter withdrawals using third-party cheques remains at N100,000, which will also contribute to the customer’s weekly withdrawal limit.
The circular requires deposit money banks to submit monthly compliance reports to the departments responsible for supervision, including Banking Supervision, Other Financial Institutions Supervision, and Payments System Supervision. These measures aim to ensure full adherence to the new regulations and enhance monitoring of cash flows within the banking system.
However, the new rules will not apply to revenue-collecting accounts operated by federal, state, or local governments. Additionally, accounts belonging to microfinance banks and primary mortgage banks domiciled with commercial or non-interest banks remain exempt.
The CBN also withdrew the previous privileges extended to embassies, diplomatic offices and donor agencies, meaning these accounts will now follow the same rules as regular commercial customers.
Nigeria’s economy is heavily cash-based, with cash transactions still accounting for a significant portion of everyday business. While the adoption of electronic payments has grown in recent years, challenges remain, including high costs of cash management, security risks during transport and storage, and potential misuse for money laundering.
The earlier deposit and withdrawal limits introduced by the CBN aimed to encourage Nigerians to adopt digital payment methods, reduce reliance on physical cash, and make monitoring of funds easier. However, with inflation and daily living costs rising, many Nigerians and businesses found the restrictions limiting and inconvenient.
The new weekly withdrawal limit of N500,000 for individuals allows more flexibility for day-to-day transactions, particularly for small businesses, traders, and households that rely on cash for purchases. For corporate entities, the N5 million limit provides easier access to working capital while still maintaining a system of control to prevent money laundering and other financial crimes.
The removal of cumulative deposit caps also reduces penalties for depositing larger sums, benefiting businesses that handle significant cash inflows, such as retailers, service providers, and local markets.
While encouraging more cash transactions, the CBN continues to promote electronic payments as a safer, more efficient alternative. The reforms are designed to reduce the burden of cash handling, which involves logistics, security personnel, and operational costs for banks and businesses alike.
The policy overhaul reflects the CBN’s attempt to strike a balance between cash accessibility, security, and digital adoption. By abolishing deposit limits and raising withdrawal thresholds, the central bank aims to support economic activity, reduce stress on banks and businesses, and improve financial inclusion.
