This policy is also applied by Nigeria to banks and is applied in refunds from purchases.
The ban on withdrawing cash from ATMs comes after the West African country launched new currencies designed to control money supply.
The Central Bank of Nigeria limits counter cash withdrawals to 100,000 naira ($225) per week for individuals and 500,000 naira ($1,124) for businesses. If they want to withdraw more cash at the counter than the above level, businesses will have to pay additional fees.
When the policy takes effect in January 2022, Nigeria's ATMs will no longer distribute high-value bills at 1,000 naira ($2.25) and 500 naira ($1.10).
Along with that, withdrawals from ATMs and sales devices will also be limited to 20,000 naira ($45) per day.
Ruben Mustafa, banking supervisor of Nigeria Bank, said that in urgent cases, cash withdrawals will be allowed but not more than once a month.
Policy makers believe that limiting withdrawals and recent monetary initiatives by central banks will attract more people to the banking system, limiting illegal cash flow and inflation.
However, other analysts are concerned that the initiative could affect the daily transactions performed by people and businesses due to the unreliable nature of digital payments in Nigeria.
Nigeria's economy depends heavily on the informal sector such as agriculture, street and market trade, and public transport. In this field, where the majority of Ninjaans work, cash is often a priority for transactions because many people do not have bank accounts. According to the World Bank, only 45% of Nigeran adults have accounts at financial institutions.
