Cash Withdrawal Limit Directive No. FIS/03/2020

NATIONAL BANK OF ETHIOPIA
ADDIS ABABA
Ref: V/G/FIS/005/2020
Date: May 19, 2020
To:
3 All Banks
O All Microfinance Institutions
Addis Ababa
Subject: Cash Withdrawal Limit Directive No. FIS/03/2020 Please find attached the Directive under caption for your information and implementation. Sincerely yours, Solomon Desta Vice Governor Financial Institutions Supervision CC.

H.E. The Governor
V/Governors
Senior Advisor
Advisors
All Directorates
National Bank of Ethiopia
A->t? M9 r."/.+. 5550/2048 *hft *TC 0115 51 45 88 AAh TC 0115 51 74 30 h.fc ADDRESS: SUDAN STREET P.O.BOX 5550 or 2048 FAX No, 0115 5145 88 TEL. No. +251-1-115 51 74 30 ADDIS ABABA TELEGRAPHIC ADDRESS: NATIONBAN K TELEX 21020 CODES-USED PETERSON 3ri & 4th ED BENTLETS 2nd PHRASE A.B.C. 6 EDITION E-mail: nbe.excd® ethionetet Website. www,http;// www.nbe.gov.et

(\ h
"
ADDIS ABABA
CASH WITHDRAWAL LIMIT DIRECTIVE NO. FIS/03/2020 WHEREAS, promoting use of non-cash payment instruments and ensuring safety and efficiency of the payment system are of utmost necessity;' WHEREAS, it has been found important to mitigate the risk of robbery, fraud, money laundering, tax evasion, illicit activities including smuggling, counterfeiting and other criminal activities which are illegal and immoral; WHEREAS, increased use of non-cash payment instruments minimizes liquidity risk and helps to ensure soundness of the financial system; WHEREAS, it is necessary to minimize the huge cost related to printing, processing and handling of physical cash; NOW, THEREFORE, in accordance with sub-article 4(2(d4)) and 37(2) of the National Payment System Proclamation No. 718/2011, and sub-article 5(15) and 27(2) of the National Bank of Ethiopia Establishment (as Amended) Proclamation No. 591/2008, the National Bank of Ethiopia has issued this Directive as follows.

1. Short Title
   This Directive may be cited as "Cash Withdrawal Limit Directive No. FIS/03/2020"
2. Definitions
   For the purpose of this Directive:

1. "account to account transfer" means a non-cash payment or fund transfer made among
   accounts within the same financial institution or in different financial institutions:

2. "cash withdrawal limit" means a cash withdrawal limit imposed on deposit accounts,
   proceeds of loans and/or encashment of cheque by customers;

3. "cashier payment order" means a paper based payment instrument issued in the name of a
   recipient or beneficiary by a financial institution on behalf of a payer;

4. "cheque" shall have the meaning ascribed to it under the Ethiopian Commercial Code:

5. "chief executive officer" of a financial institution means a person by whatever title that
   person may be referred to, who is primarily responsibly for a day to day management of the affairs of a financial institution; J /H- - '••-'"; >>•.. 5550/2048 Utft JVC 0115 51'45 88 ftAh TC 0115 51 74 30 fc.h~ ADDRESS: SUDAN STRC-ET P.O.BOX 5550/2048 FAX No, 0115 51 45 88 TEL. No. 0115 51 74 30 ADDll ABABA TELEGRAPHIC ADDRESS: NATIONBAN K CODES-USED PETERSON 3rd & 4 ED BENTLEY'S 2nd PHRASE A B C 6* ED1TIO fc-mai!: nbe.excd@ ethionet.et Website, www.http:// www.nbe.gov.et

6. "customer" means any person such as an individual, a company or a government entity that
   withdraws cash from or undertakes encashment of cheque in a financial institution;

• :

7. "deposit accounts" means saving, time deposit or any other account maintained by a
   financial institution in which a customer can deposit and withdraw money in cash or other electronic means;
8. "financial institution" means a bank or a microfinance institution licensed by the National
   Bank;
9. "Issue Account Holding Branch" means a bank branch designated by the National Bank to
   engage in the distribution and collection of currency to and from bank branches, respectively, on its behalf;
10. "National Bank" means the National Bank of Ethiopia;
11. "non-cash payment instruments" means cheques, cashier payment orders, electronic and
    account to account transfers;
12. "person" means any natural or juridical person;
13. "proceeds of loans" means the amount of money to be disbursed by a financial institution to
    a borrower pursuant to loans or any advance agreement made with the borrower.

3. Scope of the Directive
   This Directive shall apply to transactions involving cash withdrawals or encashment of cheques made by customers of a financial institution.
4. Requirements

1. A financial institution shall put in place policies and procedures that address issues
   including deployment of diversified non-cash based payment services, encouraging the public to use non-cash based payment though adoption of various strategies arid incentives, undertaking of awareness of digital financial services and ensuring of compliance with this Directive, among others.

2. The maximum cash withdrawal limit in a single financial institution by a person shall be:
   a) Ethiopian Birr 200,000.00 (two hundred thousand Birr) per day and Ethiopian Birr 1,000,000.00 (one million Birr) per month for a natural person; and b) Ethiopian Birr 300,000.00 (three hundred thousand Birr) per day and Ethiopian Birr 2, 500,000.00 (two million five hundred thousand Birr) per month for a juridical person. //

3. A financial institution shall not effect cash withdrawal transactions above the limit in 4(2)
   above for any customers.

4. For the purpose of ensuring compliance with this Directive, cash withdrawal transactions
   or encashment of cheques made by a 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 limit.

5. The National Bank may conduct examination on the systems and records of a financial
   institution to ensure compliance with this Directive.

5. Cash Withdrawal Limits to be Exceptionally Approved by Financial Institutions

1. Notwithstanding sub-article 4(2) above, a financial institution may exceptionally approve
   cash withdrawal in excess of the limit in 4(2) for customers based on proper review of evidence supporting the request submitted by a customer.
2. A financial institution shall use criteria approved by the National Bank to exceptionally
   approve cash withdrawals in excess of the limit in line with 5(1) above.
3. The decision for approving cash withdrawals in excess of the limit in line with sub-article
   5(1) stated above shall be made by the Chief Executive Officer of a financial institution.

6. Suspension of the Directive
   In the event that a financial institution is unable to implement and comply with this Directive due to force majeure including system blackout and disruption or other acceptable compelling reasons, the National Bank may temporarily suspend and withhold implementation of the Directive.

7. Submission of Weekly Reports to the National Bank
   For the purpose of determining strict compliance with cash withdrawal limits, a financial institution shall submit to Banking Supervision, Microfinance Institutions Supervision or Payment and Settlement System (for payment system related issues) Directorates of the National Bank, as the case may be, a weekly report (Annex) showing the details of cash withdrawals approved by a financial institution in excess of the limits in line with Article 5 hereinabove, no later than Tuesday of the following week.

8. Penalty
   A financial institution that violates the cash withdrawal limit of this Directive shall be fined with a penalty of twenty five percent (25%) of the cash withdrawal value exceeding the limit.

9. Exemptions
   This Directive shall not apply to cash withdrawals made within a financial institution or between financial institutions and an Issue Account Holding Branch.

10. Effective Date
    th This Directive shall enter into force as of the 19 day of May 2020.

Annex
Report on Exceptionally Approved Cash Withdrawal Transactions by Banks For the Week Ended Financial Institution:
20
Nos.

• . •- " . •""-.- - :
  Branch
  Bank Sub Total
  Total
  Name of
  Customer
  Cash Withdrawal
  Date Amount
  XXXXXX
  XXXXXXXXXX
  Reason
  Remarks
  .vv.
  N^7>v^-~X~-