The Central Bank of Nigeria has set new policies to reduce expensive and risky cash in favor of electronic payment methods. The bank released a circular to industry participants that outlines new rules for paper cash.

The circular says that the dominance of paper money has big cash management, security and money laundering implications.

Thus, encouraging use of electronic money the central bank stipulates that Nigerians will have a daily cumulative limit of N150,000 for cash withdrawals and deposits, facing fines if they go over this amount. Corporations will have to stick to a limit of N1000,000.

Besides, people will not be able to cash third party cheques above N150,000 over the counter, with customers having to receive the money though a clearing house.

The policy will apply to people in Lagos state, FCT, Port Harcourt, Kano and Aba from next June, with a roll out across the rest of the country to follow.

In addition, the bank is trying to promote interoperability of local currency POS transactions by insisting that, from next June "no card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria".