Nigeria’s New Cash Withdrawal Caps Signal a Stronger Push Toward Cashless Economy

Abuja — The Central Bank of Nigeria has introduced new cash withdrawal limits that will take effect on 1 January 2026, marking one of the most significant shifts in the nation’s cash management policy in recent years. The revised framework limits individual account holders to weekly cash withdrawals of up to six hundred thousand naira, while corporate organisations will be capped at five million naira per week. Withdrawals that exceed these thresholds will attract processing fees of three percent for individuals and five percent for corporate customers.

The announcement was contained in a circular issued by the Director of Financial Policy and Regulation, Dr Rita I. Sike. The directive, titled Revised Cash Related Policies, also abolishes previous limits on cash deposits and eliminates the fees that once applied to large deposits. It further discontinues the special monthly approval window that allowed individuals and businesses to withdraw up to five million and ten million naira respectively once every month.

Automated Teller Machine withdrawals remain restricted to one hundred thousand naira per day, subject to the broader weekly cap. Withdrawals through ATMs, Point of Sale terminals, teller counters, and all other channels will now be aggregated under the weekly limit.

The Central Bank stated that the revised policy aims to reduce the escalating cost of cash management across the financial system, strengthen the fight against money laundering, and enhance the overall security of cash circulation. According to the Bank, heavy reliance on physical cash continues to place a significant operational and financial burden on deposit money banks.

Financial institutions have been directed to submit monthly compliance reports on withdrawals above the new limits. They must also maintain internal records detailing the fees collected from these transactions, ensuring full transparency and regulatory oversight.

Industry analysts describe the policy as a decisive step in Nigeria’s transition toward a fully cashless economy. They argue that the reform will accelerate the adoption of digital payment platforms, improve transaction traceability, and boost the overall efficiency of the financial sector. However, they also warn that the adjustment period may prove difficult for sections of the population that rely heavily on cash, especially traders and households in areas with limited banking infrastructure.

For many operators in the informal sector, cash remains the most reliable means of exchange. Observers note that unless the rollout is matched with stronger digital infrastructure, improved network reliability, and broader financial inclusion strategies, the new policy could create temporary barriers for small businesses.

Corporate organisations engaged in high volume cash transactions, such as wholesale distributors and supply chain operators, may similarly need to recalibrate their liquidity management processes.

While the long-term benefits of a cashless system are widely acknowledged, the success of the new withdrawal caps will depend on how effectively the financial system supports public adaptation. The coming months are expected to test both institutional readiness and the flexibility of everyday Nigerians as the nation moves steadily toward a more digital financial future.