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Tag: Central Bank of Nigeria

  • CBN to sanction banks imposing ATM withdrawal limits below N20,000

    CBN to sanction banks imposing ATM withdrawal limits below N20,000

    The Central Bank of Nigeria (CBN) has warned that it will sanction banks that force customers to withdraw less than N20,000 per transaction from Automated Teller Machines (ATMs) despite having sufficient funds and requesting a higher amount.

    This was disclosed in a Q&A explainer released by the apex bank following its recent review of ATM withdrawal fees.

    The CBN emphasized that ATM charges for withdrawals made from other banks’ ATMs—both on-site and off-site—are based on the expectation that customers can withdraw up to N20,000 per transaction.

    It stated: “Any bank that compels a customer with sufficient funds in their account to withdraw less than N20,000 per transaction, against their desire for a higher sum, would be contravening this regulation and will be sanctioned appropriately.”

    The CBN encouraged affected customers to file complaints against banks that impose unnecessary restrictions.

    “Consumers denied the right to withdraw up to N20,000 per transaction are encouraged to file a complaint with the CBN using cpd@cbn.gov.ng.”

    The CBN further clarified that banks are not allowed to charge more than the prescribed ATM fees, though they can charge less depending on their cost structure and business model.

    “The charges and surcharges are capped, meaning banks and other financial institutions cannot charge more than the fees stated in the circular. However, a bank can charge a lower amount depending on its cost structure and business development drive.”

    The CBN advised customers to withdraw cash from their own bank’s ATMs to avoid extra charges. It also encouraged customers to explore alternative payment options such as mobile banking apps, POS terminals, and other digital payment channels to minimize ATM withdrawal fees.

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  • CBN Governor Cardoso Defends Naira Float Policy to Restore Exchange Rate Credibility

    CBN Governor Cardoso Defends Naira Float Policy to Restore Exchange Rate Credibility

    Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has explained that the decision to float the Nairain the foreign exchange market was a strategic move aimed at closing the gap between the official and parallel exchange rates, thus restoring market credibility.

    Cardoso made this statement over the weekend while addressing members of the Harvard Club of Nigeria in Lagos.

    Cardoso noted that his predecessors had considered floating the Naira but ultimately abandoned the idea, fearing massive depreciation and its ripple effects on the macroeconomic landscape.

    However, Cardoso, speaking for the first time since assuming office a year ago, said the floatation was necessary to tackle the speculative trading that thrived due to the disparity between the official and black market rates.

    “The decision to float the naira, although met with public criticism, was essential to align the official exchange rate with market reality. The disparity between the official and parallel rates encouraged arbitrage and speculation, eroding trust in the market,” Cardoso said.

    Cardoso acknowledged that the CBN’s credibility was at the core of its policy actions, adding that, “Without credibility, no policy, however well-intentioned, can succeed.”

    He stressed that the bold move was essential for addressing long-standing inefficiencies, adding that the speculative trading had reduced since the policy’s implementation, and gradual stability was returning to the currency markets.

    In his address titled “Leadership in Challenging Times: Restoring Credibility, Building Trust, and Containing Inflation,” Cardoso also highlighted the CBN’s efforts to control inflation, which remains a primary focus.

    He noted that the National Bureau of Statistics (NBS) reported recent declines in inflation for July and August 2024, indicating that the CBN’s actions were yielding positive results.

    Cardoso defended the CBN’s decision to raise the Monetary Policy Rate (MPR) to 27.25%, describing it as a “bold move” necessary to curb excess liquidity and rein in inflation. He added that, while higher interest rates were painful for borrowers, they were crucial for long-term economic stability.

    “Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these,” Cardoso said.