The Supreme Court ruled that cash withdrawal limits imposed by banks due to a scarcity of currency notes in circulation violate citizens’ rights.
The declaration was made by a seven-member panel of the court led by John Okoro in a unanimous decision delivered on Friday.
“Such restriction on an owner’s right to freely use his or her property is illegal unless provided for by law,” said Emmanuel Agim, a member of the court’s panel who read the lead judgment.
Breaking: Supreme Court Extends Old Naira Notes Validity to December 2023
The decision was made in a case challenging the federal government’s illegal withdrawal of the old N200, N500, and N1,000 notes from circulation.
Under its demonetisation policy, the federal government introduced newly redesigned N200, N500, and N1,000 notes in October 2022, with the goal of withdrawing the old versions of the currency notes from circulation within 90 days.
The Central Bank of Nigeria (CBN) also set weekly cash withdrawal limits of N500,000 for individuals and N5 million for corporate entities under the policy.
The policy’s implementation has been chaotic, with a shortage of new notes causing cash shortages across the country.
Many citizens queued at ATMs in a mad dash for cash to meet their basic needs, but many returned home empty-handed. The situation sparked violent protests by desperate citizens denied access to their hard-earned money.
In a futile attempt to distribute available cash to the greatest number of citizens, commercial banks imposed cash withdrawal limits on their customers.
The Supreme Court ruled that such action by commercial banks violated citizens’ rights.
“My attention has not been drawn to any law that allows a bank to refuse to pay cash to a customer on demand because the first defendant has not been able to print enough new naira notes,” Mr Agim said.
He also stated that he was unaware of any law “that allows the first defendant to direct the imposition of limits on the amount of cash to be paid from a customer’s account after deposit of the old naira notes”.
“To the extent that the directive has continued to deny all persons and the plaintiffs access to a substantial portion of their funds in banks in the form of cash, it forcibly and illegally interferes with their rights of ownership and use of their said funds,” Mr Agim continued. “Unless authorized by law, such restrictions on an owner’s right to freely use his or her property are illegal.”
Mr Buhari’s directive to withdraw the old N200, N500, and N1,0000 notes from circulation was overturned by the Supreme Court.
It also ordered that the old naira notes remain legal tender and circulate alongside the new ones until December 31.
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