CBN New Deposit and Withdrawal Charges: Meaning and Implication


With more emphasis being placed on Nigerian’s cashless policy mandate, the Central Bank of Nigeria has made a move that will task depositors of cash exceeding a certain amount. A breakdown of this mandate for better understanding can be seen below:

On 17 September 2019, a memo was issued to all Deposit Money Banks (DMBs) by the CBN and it is as follows:

“Further to our circular ref BPS/DIR/GEN/CIR/04/004 we write to inform all Deposit Money Banks that the CBN has approved that:

“Charges on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, Rivers states and the FCT, in addition to already existing charges on withdrawals, effective September 18, 2019.”

Based on the policy, a 3% processing fee will be charged for amount withdrawal exceeding N500, 000.00 while 2% will be charged on deposits. This is applied to individual accounts.

In addition, for business and organizational accounts, a processing fee of 5% will be charged for withdrawal and 3% for deposits that exceeds N3 million. According to the CBN, nationwide implementation of the policy will start from 31st March 2020 and strict compliance should be ensured.

CBN Governor Emefiele
Source: Punch

What really does this mean in practical terms?

The cashless policy by the CBN is not a new one in its entirety. This is according to financial analyst and economist, Ogunnubi Yinka. According to him, the introduction to this new memo by the CBN was actually issued in April 2017 when new withdrawal and deposit charges were suspended across the nation by the CBN with the exclusion of Ogun, Kano, Rivers, Anambra, Lagos and FCT. The only new change in the memo is the introduction of processing fees for lodgments in selected states with the processing fees for withdrawal remaining the same.

This is to furthermore strengthen the cashless policy and discourage people from carrying too much cash about and promote online transaction as no charges or penalty is attached to monetary transactions done by such means.


Breaking it down further, Ogunnubi gave an instance: “For individuals, if you make a deposit of N1m cash in your account, the first N500k will be free but the remaining will be subject to a 2% charge. Meaning you will be charged N10, 000.00.

For Corporate entities i.e. businesses and organizations, if they make a deposit of N6m cash into their account, the first N3m will be free but the remaining N3m will be subject to a 3% charge which amounts to N90, 000.00.”

In summary, the government through this policy will make depositors pay for depositing cash exceeding N500, 000.00. This is due to the fact that cash is expensive, the process involved and the risk of transporting this cash from one location to another.

  • Cash is expensive. Go anywhere in the world, you are charged for deposits. It is punitive alright but it is to force one to use electronic means instead of cash. Apart from the high cost of collecting and processing cash, there is also the high risk of transporting them.
  • What the processing charge is doing is merely transferring to you the cost of processing that cash that would have been borne by the bank. Many people think cash is free; it is not. It is actually very expensive to handle, collect, process and transport.
  • Actually, the CBN has been very patient on this subject. The cashless policy has been in effect since 2011. It started by the restriction of cash in transit lodgment by banks in December 2011 to 3rd party cheques above N150k no longer being eligible for withdrawal over the counter.

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