National Bank of Ethiopia sees cash withdrawal limits as a useful tool to control illegal circulation of money
May 14, 2020
The National Bank of Ethiopia has introduced cash with limits from Banks across the country. And the new policy is effective starting from May 19, 2020.
The new regulation is applicable for private banks and for state-owned banks. And authorities of the National Bank said that they will be closely following up with all the banks to ensure that they are complying with the regulation. Those who are not will be fined up to 25 percent of the withdrawal they facilitated.
All stakeholders have reached an agreement with the National Bank of Ethiopia, according to a report by state-owned Fana Broadcasting Corporation (FBC). Banks and all other financial institutions will have to make a weekly report to the National Bank of Ethiopia.
Governor the Bank, Yinager Dessie (Ph.D.), had a press statement about it on Tuesday. According to the new regulation, individuals can only withdraw only 200,000 Ethiopian birr per day (which is about 5900 USD). Companies can withdraw up to 300,000 cash.
A monthly withdrawal limit is introduced too. It is one million Ethiopian Birr for individuals ($29,500 US) and 2.5 million birr ($73,750 USD) for businesses.
The decision is reportedly informed by government interest in controlling the illegal circulation of money.
“Implementation of the new policy could only be a concern for someone who is not engaged in activities that are not legal,” the governor of National Bank of Ethiopia is cited as saying.
Companies or individuals who need to make a payment in excess of the permitted cash will have to use either a cheque or CPO (Customer Payment Order).
However, the government has made exceptions for some clients although the conditions they have to meet are unspecified.
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