Keypoints:
- Weekly cash limits set for 2026
- Fees on excess withdrawals introduced
- Policy targets money-laundering risks
NIGERIA’S central bank has announced sweeping changes to its cash management rules, introducing strict withdrawal limits and removing fee waivers on excess deposits as part of a renewed drive to reduce cash dependency and curb money-laundering risks. The measures were detailed in a circular sent to banks and financial institutions on Tuesday, according to reporting by Reuters.
Effective from January 1, 2026, the Central Bank of Nigeria (CBN) will cap weekly cash withdrawals at 500,000 naira (about $346) for individuals and 5 million naira for corporate accounts. Withdrawals above these limits will attract charges of 3 percent for individuals and 5 percent for corporate entities.
The decision marks the latest phase of Nigeria’s long-running push to modernise its payments sector and shift more economic activity from physical cash to regulated digital platforms. Over the past decade, the CBN has introduced a range of policy tools designed to promote electronic payments, improve transparency, and close loopholes commonly used by criminal networks to move money without detection.
Push toward digital financial systems
In its circular, the CBN said the updated framework aims to ‘moderate the rising cost of cash management, address security concerns and reduce the potential for money laundering’. Cash handling remains expensive in Nigeria, from minting and logistics to the security demands of transporting physical notes across a country where theft, kidnapping, and armed attacks on cash movement services have posed growing risks.
Nigeria’s financial reforms are unfolding against a shifting global backdrop. In October 2025, Nigeria and South Africa were removed from the Financial Action Task Force (FATF) ‘grey list’, which monitors countries considered vulnerable to illicit financial flows. The decision by the Paris-based organisation reflected improvements in financial oversight and a clearer enforcement framework designed to make money-laundering more difficult.
The CBN has said that by narrowing the space for large untracked cash withdrawals, the policy could help reinforce Nigeria’s standing in the global financial system. It is also expected to reduce opportunities for corruption, ransom payments, and illicit cash circulation that bypasses electronic audit trails.
Authorisations scrapped, oversight widened
Alongside new withdrawal limits, the CBN has scrapped special monthly authorisations that previously allowed individuals to withdraw up to 5 million naira and corporate entities up to 10 million naira. Exemptions for embassies and donor agencies have been removed, although government revenue accounts and certain financial institutions will continue to operate under separate rules to avoid disrupting public finance processes.
Banks will be required to closely monitor cash withdrawals that breach the new limits and report such transactions to the central bank. They must also maintain separate ledgers for charges collected on excess withdrawals, giving regulators clearer insight into cash-heavy transactions.
The restrictions are likely to prompt debate among business groups, especially in rural areas where electronic banking services remain limited and cash still dominates daily trade. Informal traders and small businesses have historically pushed back against cash withdrawal rules, arguing that network failures, digital fraud risks, and inconsistent access to point-of-sale devices complicate the shift to digital systems.
In response, the CBN has indicated that infrastructure investment, expanded mobile money services, and financial literacy programmes will accompany regulatory changes. The central bank argues that digital transactions can reduce costs for businesses over time, simplify tax compliance, and enhance financial inclusion by widening access to regulated financial platforms.
Nigeria’s effort to limit cash use reflects a wider continental move toward secure electronic payments. Governments across Africa are tightening anti-laundering rules, modernising financial systems, and aiming to protect economies from the destabilising effects of illicit money flows.
