The Central Bank of Nigeria (CBN) announced on Monday that it has excluded Microfinance Banks (MfBs) and Primary Mortgage Banks (PMBs) from its cash withdrawal limit policy.
The decision was conveyed through a circular signed by Musa Jimoh, the director of the payment system management department at CBN, and forwarded to all banks and other financial institutions (OFIs).
This latest update comes as part of the CBN’s ongoing efforts to optimize financial operations and meet the unique needs of various financial institutions.
The previous cash withdrawal policy, effective from January 9, 2023, had set a maximum withdrawal limit of N500,000 for individuals and N5 million for corporate entities.
However, recognizing the distinctive role played by Microfinance and Primary Mortgage Banks in the Nigerian financial landscape, the CBN has granted them an exemption from this limit.
In the circular, the CBN emphasized the importance of these institutions in the economy and their vital role in providing specialized retail banking services to their customers. By lifting the cash withdrawal limit for MfBs and PMBs, the CBN aims to empower them to continue their operations effectively and cater to the unique requirements of their clientele.
Microfinance Banks, which primarily serve low-income individuals and small-scale entrepreneurs, have been essential in driving financial inclusion and supporting the unbanked population in Nigeria. Their unrestricted access to cash withdrawals will enable them to serve their clients more efficiently and stimulate economic growth at the grassroots level.
Similarly, Primary Mortgage Banks, focused on providing housing finance and mortgage services, will now have the flexibility to manage larger transactions without constraints, facilitating smoother real estate transactions and promoting homeownership.
The apex bank in its circular explained that the exempted banks must ensure full compliance with other financial regulations while serving their customers. This move is expected to fortify the financial sector, instill confidence among customers, and foster a positive economic climate.