CBN removes saving, withdrawal caps on domiciliary accounts

The restrictions on domestic accounts have been lifted by the Central Bank of Nigeria.

The CBN said in a statement on Sunday that the new rule gave account holders unlimited deposit options, unrestricted access to account funds, and daily withdrawal limits of up to $10,000.

“CBN issues further guidance on operational changes to the foreign exchange market,” read the statement.

“Ordinary domiciliary account holders shall have unrestricted access to the funds in their accounts,” it stated in part. Holders of domiciliary accounts may use cash deposits up to $10,000 per day or its equivalent via telegraphic transfer.

“DMBs shall provide returns to the CBN, together with the ‘purpose’ for such transactions.

“Subject to DMBs conducting proper KYC, due diligence, and adhering to the spirit and letter of existing AML/CFT laws and other relevant rules and regulations, cash deposits into domestic accounts will not be restricted.”

In May 2021, The PUNCH reported that banks had begun imposing new restrictions on the transfers that owners of domiciliary accounts could make from cash lodgements.

The PUNCH was able to obtain a bank’s 2021 circular, which stated that the $5,000 monthly cap had been raised for cash deposits of foreign currency.

“This means that if the source of funds is a cash deposit into a domiciliary account, only a maximum of $5,000 per month will be permitted for transfers.

The phrase “cash deposits of foreign currencies other than USD may be paid into domiciliary accounts (subject to an equivalent of $5,000 monthly limit) but will not be allowed for transfer purposes.”

The Bankers’ Committee meeting, which was held to discuss the implementation and implications of the policy changes for the banking industry, led to the CBN limiting this limit.

The CBN stated that the policy modifications aimed to encourage transparency, liquidity, and price discovery in the FX market in order to improve FX supply, deter speculative activity, boost customer confidence, and guarantee overall market stability.

The statement added that the Investors’ and Exporters’ window applied to all visible and invisible transactions, including remittances for travel, school fees, BTA/PTA, and medical expenses.

Banks were urged to make sure that all eligible invisible transactions for their customers were processed quickly and at the I & E window using the appropriate rate.

In order to further boost market confidence, it was also stated that the CBN would give orderly settlement of any committed FX forward transactions priority as they became due.

The CBN would engage stakeholders as it carried out the ongoing reforms, normalize its procedures for maintaining the Cash Reserve Ratio, and ensure equity in its application across the banking sector.