The National Bank of Ethiopia [NBE] has enacted Directive No. FIS/03/2020, that came into effect as of 19th May 2020. Entitled “Cash Withdrawal Limit”, the Directive has limited the cash withdrawal by individuals, companies and government entities who maintains bank accounts. Accordingly, individual accountholders are allowed to withdraw, in cash or by encashment of cheque, from a given financial institution, only Birr 200,000 (two hundred thousand) per day and Birr 1,000,000 (one million) per month, while corporate accountholders are allowed only for withdrawal, in cash or by encashment of cheque, Birr 300,000 (three hundred thousand) per day and Birr 2,500,000 (two million five hundred thousand) per month.
These limitations are applicable on aggregate basis; in other words, “cash withdrawal transactions or encashment of cheques made by customer in different branches of a financial institution from one or more deposit accounts in a day or month shall be aggregated and compared with the [withdrawal] limit.” These limitations are not applicable “to cash withdrawals made within a financial institution or between financial institutions and an Issue Account Holding Branch” and cash withdrawals made by “non-cash payment instruments”.
The Directive has defined “Issue Account Holding Branch” as “a branch of a bank designated by NBE to engage in the distribution and collection of currency to and from the bank’s branches, respectively, on its behalf”. The Directive has also defined “non-cash payment instruments” as “cashier payment orders, electronic and account to account transfers” and “cashier payment orders” are defined as “paper-based payment instrument issued in the name of a recipient or beneficiary by a financial institution on behalf of a payer.”
The Chief Executive Officer of a financial institution can allow the customer of his/her bank or microfinance institution to withdraw beyond these limitations, “based on proper review of evidence supporting the request submitted” by the customer. However, to do so the financial institution should put in place a policy, which needs to be preapproved by NBE.
Financial institutions are also required to submit to NBE, a weekly report “showing the details of cash withdrawal approved by the financial institution beyond the limit provided by the Directive”. A financial institution that violates the cash withdrawal limit that is provided in the Directive will be “fined with a penalty of 25% (twenty five percent) of the cash withdrawal value exceeding the limit”.
Posted on 21st of May 2020
| File | Description | File size |
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 Cash withdrawal limit directive no FIS 03 2020 (1).pdf | 730 kB |