Limits on CBN cash withdrawals are illegal, says Falana
The Central Bank of Nigeria's (CBN) new cash withdrawal restriction has been criticized by human rights attorney Femi Falana, who called it "illegal, null, and void."
The CBN had instructed Deposit Money Banks (DMOs) and other financial institutions to make sure that weekly over-the-counter (OTC) cash withdrawals by individuals and corporate entities did not exceed N100,000 and N500,000, respectively, as part of its cashless strategy.
The daily maximum withdrawals from point of sale (PoS) terminals were also set at N20,000 by the CBN. The change will go into effect on January 9, 2023, according to the apex bank.
Falana, however, claimed in a statement on Monday that the current action by the top bank is "embarrassing" and against the laws of the country.
Since the Money Laundering Act of 2022, which set the maximum cash withdrawal at N5 million, has not been modified, the Central Bank of Nigeria's restriction on cash withdrawals to N20,000 per day and N100,000 per week is unlawful, void, and unenforceable in all respects. We implore Nigerians to disregard the unlawful pronouncement, the attorney stated.
"However, we are constrained to call on President Muhammadu Buhari to instruct the CBN management to remove the unconstitutional guideline and cease announcing new policies that are intended to condemn poor persons to further agonizing economic misery."
The whole statement is provided below:
IN NIGERIA, THE MAXIMUM WITHDRAWAL LIMIT IS N5 MILLION.
The Deposit Money Banks (DMOs) and other financial institutions have been directed by the Central Bank of Nigeria (CBN) to guarantee that weekly over-the-counter (OTC) cash withdrawals by both private people and corporate entities do not exceed N100,000 and N500,000, respectively. The regulatory directions have capped the weekly maximum cash withdrawal from an ATM at N100,000, subject to a daily ceiling of N20,000, and will go into effect nationally on January 9, 2023.
The fact that the Central Bank of Nigeria has been issuing statements without taking into account the Constitution or other important legislation pertaining to the national economy is shameful. The fact that the Governor of the Central Bank of Nigeria allegedly restricted cash withdrawals in Nigeria in direct violation of section 2 of the Money Laundering Act of 2022, which states the following:
“2.(1) No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding (a)5,000,000 or its equivalent, in the case of an individual ; or (b) N10,000,000 or its equivalent, in the case of a body corporate.
(2) A person shall not conduct two or more transactions separately with one or more financial institutions or designated non-financial businesses and professions with intent to (a) avoid the duty to report a transaction which should be reported under this Act ; and (b) breach the duty to disclose information under this act by any other means.”
The Central Bank of Nigeria's limitation on cash withdrawals of N20,000 per day and N100,000 per week is illegal, null, and void in every material respect because the Money Laundering Act 2022 (which set the maximum cash withdrawal at N5 million) has not been modified. We implore Nigerians to disregard the unlawful announcement.
However, we feel forced to urge President Muhammadu Buhari to order the CBN's management to rescind the unlawful directive and cease releasing new regulations that aim to further impoverish the nation's poor.
FEMI FALANA SAN,
The Chair,
Alliance on Surviving Covid 19 and Beyond (ASCAB)
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