ATMs empty as banks ration withdrawals

The Automated Teller Machines of Deposit Money Banks have consistently remained empty in recent months as banks grapple with a sustained low cash supply.

It was also gathered on Wednesday that some DMBs, particularly in the Federal Capital Territory, have begun another round of cash rationing, restricting maximum over-the-counter withdrawals to a daily limit between N5,000 and N20,000.

While banks struggle to get cash, Point-of-Sales operators have been fulfilling the cash needs of customers.

Speaking at the Facts Behind the Rights Issue Presentation of FBN Holdings at the Nigerian Exchange Limited recently, the Executive Director/Chief Financial Officer of First Bank, Patrick Iyamabo, said that the matter was an industry-wide one and not peculiar to a specific bank.

He said, “It is an industry problem. Most customers after exhausting the options available in other banks, tend to settle at FirstBank to address their cash needs. The challenge differs by location but we know it is a challenge that the regulator is looking into to address. But as we speak of physical cash, we must appreciate that the direction of the industry is to go digital.

“A lot of our customers do most of their transactions digitally, and you heard the GMD speak to this, very often people don’t want to transact in cash. In terms of this new order, your bank, FirstBank is very well positioned so if you look at the statistics and I’m speaking to independent statistics, just pick up your NIBSS report, the bank with the most stable platform meaning availability to always transact digitally is FirstBank. So, all our customers have the benefits of having their cash in First Bank and having access to this cash anytime anywhere and as necessary. It’s a huge advantage.”

Speaking anonymously with The PUNCH, a banker at a tier-1 bank put the blame on the Central Bank of Nigeria.

“I was just informed that I can only withdraw N5,000 from my account. Can you imagine? The amount will can’t even take me home.”

Our correspondent received the same answer when he attempted to obtain cash.

At GTBank and Zenith Bank along the airport road, customers were permitted a maximum withdrawal of N20,000 from N100,000 previously disbursed as a daily limit.

A customer, Mr Faith, who visited the bank expressed shock about the new limit. He said the banks didn’t give any cogent reason for reducing the withdrawal limit.

“I just visited these banks, and I was informed that I can only withdraw N20,000 from N100,000, which was the previous limit. They didn’t even give any reason for reducing, now I have to start looking for cash elsewhere. This country is just so annoying,” He vented.

Cash scarcity became a recurring and widespread issue across Nigeria after the Central Bank of Nigeria introduced a controversial policy in January 2023, which significantly reduced the daily and weekly cash withdrawal limits to N100,000 daily, N500,000 weekly for individuals, and N5m for business entities.

This decision, aimed at encouraging a cashless economy, led to long queues at ATMs, increased difficulty in accessing physical cash, and a general disruption of daily financial transactions for millions of Nigerians.

The policy’s impact was felt particularly by those in rural areas and lower-income groups, who rely heavily on cash for their day-to-day needs, exacerbating economic hardships across the country.

Last week, data from the CBN showed that currency in circulation climbed 56.1 per cent year-on-year to reach N4.31tn, up from N2.76tn in September 2023, reflecting an increase of N1.55tn.

This is just as currency outside banks surged by 66.2 per cent in September 2024, reaching N4.02tn compared to N2.42tn in September 2023, a notable rise of N1.60tn in just one year.