news - Nigeria: “CBN excludes MFBs, PMIs from cash withdrawal/deposit limit policy”

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Nigeria: “CBN excludes MFBs, PMIs from cash withdrawal/deposit limit policy”
March 8, 2012

BUSINESSDAY, 05 MARCH 2012 - The Central Bank of Nigeria (CBN) has clarified that Microfinance Banks (MFBs) and Primary Mortgage Institutions (PMIs) are excluded from the policy of cash withdrawal and deposit limits.

This is coming on the heels that Deposit Money Banks (DMB) are applying withdrawal/deposit limits for corporate organisations such as MFBs and PMIs.

According to the CBN, MFBs and PMIs are specialised banks as defined under the new banking model which have customers that maintain savings demand and time deposit accounts with them.

As deposit-taken institutions, they are obliged to honour the request of their customers and other mature obligations. In a circular to all deposit money banks on the “Need for Clarification on Cash Withdrawal Limit for MFBs and PMIs”, the CBN explained that the aggregate withdrawals by depositors of MFBs and PMIs per day could exceed N1 million, thus necessitating those institutions to withdraw over N1 million from their correspondent banks in order to service their customers.

Part of the circular signed by G. I. Emokpae, Ag director, banking and payments system department, CBN, reads thus: it has, therefore, become necessary to clarify that direct withdrawal/deposit by microfinance banks and primary mortgage institutions are excluded from the policy of N1 million limit for corporate bodies to enable them meet the legitimate demands of their numerous customers.”

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