Banks are free to use ATMs to pay any amount, according to CBN

The Central Bank of Nigeria (CBN) may have rescinded its previous order prohibiting banks from putting higher denomination banknotes into Automated Teller Machines (ATM), stating financial institutions are free to accept payments in any denomination via the channels.

The highest denominations that may be withdrawn from ATMs were limited to N200 by the central bank as part of the initial circular regulating cash holding. Additionally, it set weekly cash withdrawal limits of N100,000 for private persons and N500,000 for business companies.

The limitations were increased in a subsequent notification to N500,000 for individuals and N5,000,000 for corporate entities, respectively. Other aspects of the aggressive cashless policy enforcement were examined, but not the limit on ATM payable denomination.

Yesterday, when the reversed policy went into effect, people anticipated that the banks would start issuing N200 notes at ATM locations. However, almost all ATMs in Lagos continued to issue N1000 and N500, which the CBN views as non-transactional but a store of value in its aim to minimize cash-based transactions, in what was deemed a violation of the regulatory regulation.

Osita Nwanisobi, the CBN’s director of corporate communication, said yesterday over the phone that the banks had not breached any rules since they were free to fill the ATMs with whichever denominations they desired because they were not subject to any restrictions.