The Central Bank of Nigeria (CBN) has introduced a daily cash withdrawal limit of N100,000 per individual customer for Point-of-Sale (POS) agents, effective immediately. The move, part of measures to strengthen Nigeria's cashless policy, aims to address challenges in agent banking, curb fraudulent activities, and promote electronic payment systems.

The directive was issued in a circular dated December 17, 2024, signed by Oladimeji Taiwo on behalf of the Director of the Payments System Management Department at the CBN. It was addressed to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and Super-Agents, mandating strict compliance.

Key provisions of the circular include a weekly cash withdrawal limit of N500,000 per customer and a daily cumulative cash-out limit of N1.2 million per agent. POS agents are required to set their terminals to the specified daily cash-out limit of N100,000 per customer. The directive also mandates that all agency banking transactions be conducted through float accounts maintained with principal financial institutions.

To ensure operational transparency, agent banking services must be separated from other merchant activities, using the designated Agent Code 6010 for transactions. All agent banking terminals are required to connect to the Payments Terminal Service Aggregator, with daily transaction reports submitted electronically to the Nigerian Inter-Bank Settlement System using a template provided by the CBN. Principals of agent banking operations must monitor accounts linked to agents' Bank Verification Numbers (BVNs) for unauthorized activities, and they will be held accountable for any breaches.

The CBN has also announced plans for periodic oversight and impromptu backend configuration checks to ensure compliance. Violations of the directive will result in penalties, including monetary fines and administrative sanctions.

This policy is expected to significantly affect POS operators and customers, especially in areas with limited banking infrastructure. However, the CBN emphasized that adherence to the new rules is crucial for the smooth implementation of the policy and for advancing Nigeria's cashless economy.

The directive comes against the backdrop of concerns over the high volume of cash circulating outside the formal banking system. The CBN reported that 94.3% of the currency in circulation, amounting to N4.29 trillion as of October 2024, was outside the control of deposit banks. This marks a significant increase from October 2023, when 89.6% of the currency was held outside banks, representing a year-on-year growth of 59% or N1.59 trillion. Month-on-month, the amount of currency outside banks rose by 6.8%, from N4.02 trillion in September 2024 to N4.29 trillion in October.

These statistics underscore the need for policies aimed at deepening financial inclusion and transitioning Nigeria toward a more cashless economy.