Nigeria is set to take another major step toward a more digital financial system as the Central Bank of Nigeria (CBN) unveils new cash-related policies effective January 1, 2026.
The revised framework aims to reduce the high cost of managing physical cash, enhance security, and discourage the hoarding of large amounts of currency. While the CBN continues to promote digital payments, it acknowledges that many Nigerians still rely heavily on cash for daily transactions.
The changes were announced in a circular titled “Revised Cash-Related Policies” issued on December 3, 2025, by Dr. Rita Sike, Director of Financial Policy and Regulation.
This new directive replaces more than twenty earlier guidelines, marking one of the most significant policy overhauls since the 2022 cash redesign crisis.
What Has Changed?
Cash deposits are now completely free, with no limits and no penalties. Individuals and businesses can deposit any amount without incurring additional charges, a major relief for traders, market operators, and others who routinely handle large volumes of cash.
However, weekly cash withdrawal limits have been tightened:
- Individuals: Up to ₦500,000 per week
- Businesses: Up to ₦5 million per week
Withdrawals that exceed these limits attract penalties, 3% for individuals and 5% for businesses. These charges will be shared between the CBN and the processing bank.
ATM withdrawals are capped at ₦100,000 per day, and these count toward the weekly limit. All naira denominations will now be stocked in ATMs for better accessibility.
Additionally, third-party cheques above ₦100,000 can no longer be cashed over the counter and will also count toward the withdrawal limit.
The previous system that granted special waivers, allowing individuals to withdraw up to ₦5 million and corporates up to ₦10 million monthly, has been scrapped.
Banks are now required to maintain detailed monthly reports of all cash deposits and withdrawals above the approved limits and forward them to the CBN.
Who Is Exempt?
Government accounts at the federal, state, and local levels remain exempt from the new withdrawal limits.
Microfinance banks, primary mortgage institutions, and select non-interest financial institutions are also excluded from the caps.
However, embassies, diplomatic missions, and international donor agencies will now operate under the same withdrawal restrictions as the general public.
Why the Policy Matters
Nigeria has spent more than a decade trying to reduce its dependence on cash. The cashless policy introduced in 2012 sought to lower operational costs, curb corruption, and modernize Nigeria’s financial system.
There have been notable gains. In 2025, Nigeria was removed from the FATF grey list, reflecting improvements in anti–money laundering controls. Electronic payment adoption has also surged, with billions of transactions recorded in 2025.
Yet, many Nigerians still operate in cash-heavy environments. Limited internet access in rural areas and lingering distrust in digital platforms continue to slow progress.
The CBN’s new approach attempts a middle ground—promoting digital payments while accommodating the realities of the informal sector.
Experts are divided. Some view the policy as a balanced and practical adjustment. Others warn that increased cash usage could worsen inflation or raise currency in circulation at a time when Nigeria is still battling rising prices and a volatile naira.
How It Affects You
For many Nigerians, especially traders and cash handlers, the removal of deposit limits is a welcome relief. Individuals can now deposit high-value cash without fear of extra charges.
However, the ₦500,000 weekly withdrawal cap may pose challenges for people who depend heavily on cash, such as event planners, wholesalers, and market operators. Individuals who exceed the limit will pay a 3% penalty on the excess amount.
Businesses have more flexibility with a ₦5 million weekly limit, but they are encouraged to adopt digital payment channels such as PoS, mobile banking, and transfers to avoid penalties and streamline operations.
In addition, the CBN now mandates banks to refund verified cases of digital fraud within 72 hours, making cybersecurity more critical than ever.
Way Forward
The revised withdrawal policy reflects a future where cash remains relevant but no longer dominant. With full implementation expected before the end of 2025, customers are advised to consult their banks and prepare ahead.
Nigeria’s financial landscape is rapidly evolving. Understanding these changes will help individuals and businesses adapt as the nation advances toward a safer, more efficient cash-light economy.
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