By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has exempted primary mortgage banks and microfinance banks from cash withdrawal limits and processing penalties as it aims to boost credit for retail borrowers in the country.
This was announced by the apex bank in a directive to banks and other financial institutions on Monday night, saying this will enable them to continue playing their expected role in the economy and provide specialized retail banking services to customers.
The notice, Exemption Of Primary Mortgage Banks And Microfinance Banks From Cash Withdrawal Limits is targeted at organisations lending to the “economically active poor,” the statement on its website signed by Mr Musa I. Jimoh, Director, Payments Systems Management Department said.
It reads, “The Central Bank of Nigeria hereby directs the exemption of microfinance banks and primary mortgage banks that provide banking services to the economically active poor frame paying the processing fees for withdrawals above the cash withdrawal limits for direct cash withdrawals from their correspondent banks. This is to enable them to continue to play their expected roles in the economy and provide specialised retail banking services to their customers.
“Please note that the microfinance and primary mortgage banks are required to fully comply with the cash withdrawal limits in serving their customers as per the circular with reference number BSD/OR PUBAAB/015/073 dated December 21, 2022.”
In December, the CBN, under the now-suspended Governor Godwin Emefiele, limited cash withdrawals by corporate organizations from banks to N5 million per week. It also imposed a processing fee of 5 per cent where the cash must be withdrawn. The rule, which aimed to encourage digital payments at the time, also imposed a weekly withdrawal limit of N500,000 on individuals.
With this new directive, primary mortgage banks and MFBs can help deliver cheap credits to businesses to stimulate economic growth under President Bola Tinubu’s administration.
