Mixed reactions continue to trail the decision of the Central Bank of Nigeria (CBN) to limit daily cash withdrawals to N150,000 for individuals and N1 million for corporate. Respondents who commented to the story on NEXT website were divided as to the practicability of the new policy.
The CBN on April 20 sent a circular to all banks, Cash-in-Transit (CIT) operating firms, payments system service providers, that effective June 1, 2012, any transaction above the threshold would attract penalties. “Contravention of this policy shall attract a fine of five times the amount that the bank waives as a first offender, while the bank shall, subsequently, pay 10 times the charges waived,” the circular stated.
The CBN also cautioned that where a bank allows a third party cheque encashment in violation of the stipulated regulation, such a bank would be made to pay higher than the sanctions between 10 percent of the face value of the cheque and N100,000 fine.
A respondent, Tolulope Olalekan said while the new rule may have been done with good intentions, its implementation needs to take cognisance of market realities. “The cash limits are clearly too small for both individuals and corporate organizations respectively. It should be reviewed upwards,” and recommended that such policies should only be implemented when the country’s infrastructure facilities can support it.
New hydra-headed problems
This point was corroborated by Chidi Davies who believes the one year cutoff date does not tally with Nigeria’s roadmap on power, which is required for ecommerce to thrive efficiently. “So how does the CBN expect transactions for agric products, building materials etc. We desire to shrink the centuries of Western development into months for Nigeria development, but short term/quick fix solutions to otherwise gradual/longterm situations usually creates new hydra-headed problems,” he stated. According to him, the CBN should first support and develop the enabling infrastructure for a cashless operation when other things can fall into place. “The CBN should be more creative in its drive towards cashless economy to avoid strangling the economy itself.”
For Abubakar Suleiman, the CBN move is commendable as it would help curb corruption and transfer of funds from illicit means. He said as more Nigerians sign up to ATM (automated teller machine) usage, the policy would be more justified. He said the quest by CBN to encourage telephone banking would also fit in with the new environment. “Most of the cash withdrawn from banks serves only to fund corruption. Most individuals have embraced ATM for their cash needs. Businesses are signing up to POS (point of sales) terminal. In addition, the CBN has created Real Time Gross Settlement system that allows same day value.”
No wide embrace
However, the low level of deployment of POS terminals, especially in areas outside the major commercial centres in the country may impede the wide embrace of the policy. Janet Oladeji said the new policy would affect foodstuff dealers whose business thrive on cash dealings and the convenience that it brings. According to her, the average foodstuff dealer does not want to rely on cheques which could be cumbersome due to the settlement system in the country. “For this policy to be effective, I feel it is necessary to get the economy working electronically before such a policy is put in place,” she added.
While the economy awaits the start of the new policy, the CBN has made it clear that the arrangement shall be in force in Lagos state, Abuja, Port Harcourt, Kano and Aba in the first instance. “The arrangement shall be extended to other parts of the country at a date to be determined by the Bankers Committee.” According to the CBN, as it embarks on awareness programmes, individual banks are expected to do same. “The affected customers of banks should be informed in good time by the banks with clear advice on alternative electronic payment channels available to them,” the CBN stated.