The Supreme Court ruled that banks’ cash withdrawal restrictions—imposed as a result of the limited supply of currency notes in use—violated the rights of residents.
The pronouncement was made in a unanimous ruling issued on Friday by a seven-member court panel chaired by John Okoro.
Unless authorized by law, a restriction on a property owner’s freedom to use their property is unlawful, according to Emmanuel Agim, a judge on the court’s panel who read the main decision.
The court issued its ruling in a lawsuit contesting the illegal removal of the old N200, N500, and N1,000 from circulation by the federal government.
The freshly redesigned N200, N500, and N1,000 notes were first released by the federal government in October 2022 as part of a process known as “demonetization,” which planned to remove the older notes from circulation within 90 days.
The Central Bank of Nigeria (CBN) also set maximum weekly cash withdrawal limitations of N500,000 for individuals and N5,000,000 for business organizations under the policy.
Due to a shortfall of the new notes, there has been chaos in the policy’s implementation throughout the nation.
In a frenzied hunt for cash to cover their basic requirements, many individuals stood in line at ATM locations, but frequently went home empty-handed. Due to the circumstance, those who were denied access to their hard-earned money violently protested.
In a fruitless effort to divide available cash among the greatest number of residents equally, commercial banks resorted to imposing limits on the amount of cash that clients may withdraw.
The commercial banks’ actions were deemed a breach of citizens’ rights by the Supreme Court.
The first defendant’s inability to print enough new naira notes, Mr. Agim claimed, did not allow a bank to refuse to pay a customer in cash on demand. “My attention has not been drawn to any law that permits this,” Mr. Agim said.
A law “that authorizes the first defendant to direct the placement of limits on the cash to be paid from a customer’s account following deposit of the old naira notes” was not known to him, he added.
“To the extent that the directive continues to deny all persons and the plaintiffs access to a significant portion of their assets in banks in form of cash, it forcibly and illegally interferes with their rights of ownership and use of their said monies for,” Mr. Agim concluded. Such a restriction on a property owner’s freedom to utilize their property is unlawful unless authorized by law.
Mr. Buhari’s order to remove the old N200, N500, and N1,000 notes from circulation was overturned by the Supreme Court.
However, it stipulated that the old naira notes will continue to be accepted as legal tender and circulate alongside the new ones through December 31.
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