The Central Bank of Nigeria (CBN) has taken a significant step in supporting Microfinance Banks (MfBs) and Primary Mortgage Banks (PMBs) by excluding them from its cash withdrawal limit policy. This move, disclosed in a circular to all banks and other financial institutions (OFIs), signed by Musa Jimoh, director of the payment system management department at CBN, aims to empower these institutions to continue playing their crucial roles in the economy and providing specialized retail banking services to their customers.
As part of its ongoing efforts to regulate cash transactions and ensure financial stability, the CBN had initially updated its cash withdrawal policy, which came into effect on January 9, 2023. The updated policy set a maximum cash withdrawal limit of N500,000 for individuals and N5 million for corporate entities. However, in recognition of the unique functions of Microfinance Banks and Primary Mortgage Banks, the CBN has granted them an exemption from this limit.
In its circular, the CBN stated, “The microfinance and primary mortgage banks are required to fully comply with the cash withdrawal limits in serving their customers as per the circular with reference number BSD/DIR/PUB/LAB/015/073 dated December 21, 2022.” This exemption allows MfBs and PMBs to cater to the needs of their customers without constraints, enabling them to facilitate greater financial inclusion and economic growth.
The decision to exclude MfBs and PMBs from the cash withdrawal limit policy aligns with the CBN’s broader vision of fostering a robust financial ecosystem in Nigeria. These specialized institutions play an essential role in providing financial services to underserved communities, rural areas, and small businesses. By freeing them from the withdrawal limit, the CBN aims to enhance their ability to meet the unique demands of their clientele.
READ ALSO Central Bank of Nigeria Raises Interest Rate to 18.75% Amidst Soaring Inflation
Microfinance Banks primarily target low-income individuals and microenterprises, offering them access to credit, savings, and insurance products. By exempting them from the cash withdrawal limit, the CBN enables MfBs to facilitate convenient and timely access to funds for their customers, encouraging financial stability and entrepreneurship.
On the other hand, Primary Mortgage Banks focus on providing mortgage financing for individuals and corporate entities seeking to own homes. The exemption from the cash withdrawal limit empowers PMBs to efficiently manage large transactions related to real estate purchases, ultimately supporting the growth of the housing market.
This decision by the CBN reflects a positive step in nurturing financial inclusivity and fostering a conducive environment for economic development in Nigeria. It is expected to strengthen the roles of Microfinance Banks and Primary Mortgage Banks, enabling them to better serve their customers and contribute to the nation’s economic growth.
In conclusion, the Central Bank of Nigeria’s decision to exclude Microfinance Banks and Primary Mortgage Banks from the cash withdrawal limit policy highlights the significance of these institutions in driving financial inclusion and specialized banking services. By recognizing their unique functions and exempting them from the withdrawal limit, the CBN supports their efforts to create a more robust and inclusive financial landscape for all Nigerians.
JOIN NOW
https://t.me/PAWSOG_bot/PAWS?startapp=6ZSAPFb3
Google News Channel
Follow us on Google News for Latest Headlines
Join Our WhatsApp, Facebook, or Telegram Group For More News, Click This Link Below;
WhatsApp Channel
https://whatsapp.com/channel/0029VaELqhlHVvTXjDnUf80h
WhatsApp Group
https://chat.whatsapp.com/G6Lo3ss6WKLCOqBphZwQGk
Facebook Page
https://facebook.com/allmedia24news
Our Twitter Page
https://www.twitter.com/allmedia24news
Telegram Group
https://www.threads.net/@allmedia24news
