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Cash Withdrawal Limit: Falana, POS Operators Threatens Legal Action If Govt Doesn’t Reverse The Policy

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Point of Sale (POS) operators under the aegis of the Association of Mobile Money and Bank Agents of Nigeria (AMMBAN), have threatened to drag the Central Bank of Nigeria (CBN) to court if it doesn’t cancel its recent policy of cash withdrawal limits.

Naija News reports that the POS association has said they will engage the services of human rights lawyer Femi Falana (SAN) in the proposed legal suit against the CBN if the bank fails to reverse the directive.

The group’s National President, Victor Olojo, told Punch that POS agents, through the association’s lawyer, Douglas Okojie, had concluded plans to initiate a legal suit on the development.

Olojo, who appealed to the CBN to listen to the plight of mobile money and bank agents noted that “The first option is to write to Falana to represent AMMBAN in the legal action about to be initiated. While the second option is to get another lawyer to apply to the court, maybe after the suit has been filed, and make AMMBAN an interested party in the suit.”

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Naija News reported on Monday that the human rights lawyer, Falana had described the CBN policy limiting over-the-counter cash withdrawals by individuals and companies to N100,000 and N500,000, respectively, per week as illegal.

Falana noted that the policy was illegal because the Money Laundering Act 2022, which has fixed the maximum cash withdrawal to N5 million, has not been amended.

Falana in the statement he titled “Maximum withdrawal limit is N5m in Nigeria” explained that the Money Laundering Act, 2022 stated that “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)N5,000,000 or its equivalent, in the case of an individual or (b) N10,000,000 or its equivalent, in the case of a body corporate.

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“(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 human rights lawyer also called on President Muhammadu Buhari to direct the management of the CBN to withdraw the illegal guideline which is set to take effect from January 9 2023.

However, Naija News gathered that Falana while speaking about the issue, told Punch that he awaits the response from the president and the CBN before the next line of action is taken.

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He pointed out that “We have not got to that stage yet. I want them to reply to me first. Tell them I said it is not constitutional. If they fail to withdraw the order, then we will sue, that I can assure you.

“I read in The Punch newspapers of the number of PoS businesses that will be affected. Take a look at the effect on market women and others who sell wares. How many of them have PoS machines? How many of them will be willing to engage in bank transfers? Last week, I, despite being someone who is familiar with smartphones, made a cash transfer to someone, but the person called to tell me that he has not received the amount I sent.”

Naija News recalls that the CBN issued a memo last Tuesday fixing daily and weekly withdrawal limits to N20, 000 and N100,000 respectively.

The memo signed by the CBN’s Director of Banking Supervision, Haruna Mustafa, reveals that withdrawals above the thresholds would attract processing fees of 5% and 10%, respectively, for individuals and corporate entities going forward.

It also said third-party cheques above N50,000 shall not be eligible for OTC payment while extant limits of N10m on clearing cheques still remain.

The circular also directed banks to load only N200 and lower denominations into their ATMs and restricted withdrawal to N20, 000 per day from ATMs.

The policy, which will become effective on January 9, 2023, had generated criticisms but the CBN clarified last Wednesday that POS operators could apply for waivers.