The Central Bank of Nigeria (CBN) has recently lifted the restriction on ATM denominations, allowing financial institutions to dispense cash in any denomination through their ATMs.
Prior to this change, the CBN had capped maximum denominations payable at ATMs at N200, as well as setting a limit on cash withdrawals for individuals and businesses at N100,000 and N500,000 per week, respectively.
However, in a recent follow-up notice, the CBN increased the limits to N500,000 for individuals and N5 million for corporate entities. Along with this change, other aspects of the cashless policy enforcement have also been reviewed.
Banks are now given greater flexibility in dispensing cash through ATMs, enabling customers to have access to the denomination they need.
In light of the recent policy reversal by the Central Bank of Nigeria (CBN) allowing financial institutions to dispense cash in any denomination through their ATMs, customers were expecting to see the dispensing of N200 notes at ATM points.
However, in a seeming contradiction of the regulatory directive, most ATMs in Lagos have continued to dispense only N1000 and N500 notes, which the CBN deems as “non-transactional” and a store of value in its effort to reduce cash-based transactions.
According to the Director of Corporate Communication at the CBN, Osita Nwanisobi, banks have not broken any rules as they are free to load ATMs with any denomination they have, and are not under any restriction.
“They can load any denomination,” Nwanisobi stated. “If they have N1000, they should load it; if they have N500 they should load it. If they have N200, they should go ahead and load it.”
This clarification suggests that commercial banks are not obligated to provide customers with scarce lower denominations through ATMs. The majority of ATMs are configured for N1000, while a few pay N500.
It should be noted that, in the past, a few ATMs did dispense N200 and N100 banknotes, but that is no longer the case. The CBN directive aims to encourage banks to begin re-circulating small notes, despite their reluctance due to the high cost of managing small denominations.
The CBN stated in a media report that banks are now only authorized to dispense new notes through ATMs going forward. This announcement came amidst persistent scarcity of the redesigned naira in and outside of banks.
Despite the CBN’s position, ATMs continue to dispense banknotes scheduled for demonetization at the end of this month. While some banks have claimed that their customers can now make withdrawals in new notes at ATMs, checks have revealed that many are still dispensing old notes both over the counter and through ATMs.
