The Bank of South Sudan (BoSS), which is the Central Bank of South Sudan, has announced that cash withdrawals across all channels, including commercial banks, will be capped at SSP 10,000,000 (~$76,700).
This measure, communicated to the public, aims to enhance financial management and security within the banking system.
- BoSS Governor urged all banks to make it easy for citizens to open bank accounts
- Commercial bank penetration in South Sudan stands at 1.45 bank branches per 100,000 adults, according to the World Bank
Withdrawals exceeding SSP 10 million must be processed either through a bank account or via interbank transactions, which includes mobile money services. This move is part of a broader effort to ensure compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, emphasizing the importance of Know Your Client (KYC) procedures and customer due diligence.
The restrictions apply to both the public and private sectors, as part of a broader initiative aimed at reducing the reliance on physical currency and fostering the digitalization of the nation’s financial services.
In a circular dated September 16 2024, the Central Bank urged clients to utilize alternative authorized channels for their banking needs, promoting transparency and encouraging the digitization of financial services. The bank highlighted the crucial role that commercial banks and mobile money agents play in providing access to financial services, particularly in underserved and rural communities.
“The public is encouraged to embrace electronic payment platforms, including mobile money, credit and debit cards, which incur low charges on transactions while offering convenience and establishing individual credit history,” the circular stated.
🇸🇸The Bank of South Sudan (BoSS) issues a circular on cash withdrawal limits in the banking industry pic.twitter.com/EM9P3JJHda
— BitKE (@BitcoinKE) September 24, 2024
Moreover, the Bank of South Sudan reiterated its commitment to guiding these sectors in fulfilling their strategic roles while adhering to existing regulations. It also encouraged all public and private sector employees to open bank accounts to foster a more inclusive financial environment.
One of the key objectives of this new policy is to bring more people into the formal financial sector. South Sudan’s banking system has traditionally been exclusionary, with many citizens unable to access basic banking services due to a variety of barriers, including complex account-opening procedures and geographical limitations. To address these issues, BoSS has directed commercial banks to simplify the process of opening accounts, particularly for those who have historically been excluded from the financial system.
As South Sudan grapples with rampant inflation and rising consumer prices, exacerbated by a limited supply of goods and services, these measures are designed to stabilize the economy and enhance financial accountability.
As reported by BitKE, in an effort to stabilize the currency and reduce the demand for US dollars, the Bank of South Sudan suspended the use of foreign currencies in local transactions in February 2023.
In February 2023, South Sudan Suspended the Use of US Dollar in an Effort to Rein in Inflation and High Cost of Living
The Bank of South Sudan demanded all commercial agreements be denominated in the local currency.https://t.co/oZrEUS0jg1 #SouthSudan #SudanCrisis
— BitKE (@BitcoinKE) April 24, 2023
This move was intended to promote the use of the South Sudanese pound, which had been significantly undermined by hyperinflation and volatility. According to the central bank, the widespread use of the US dollar in domestic transactions was fueling speculation in the foreign exchange market and putting additional pressure on the already limited supply of hard currency.
By promoting the use of mobile money and other electronic payment platforms, the government and central bank are taking important steps toward creating a more inclusive, efficient, and resilient financial system.
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