Already, banks are sensitising customers for take-off of the Central Bank of Nigeria’s cash-less policy in the five additional states, with some of them sending text messages to account holders alerting them on new cash deposit and withdrawal benchmarks as well as other requirements of the scheme.
Although the Lagos pilot project, which began a year ago, is still fraught with challenges, ranging from poor ICT infrastructure to network ‘downtimes’ associated with poor quality of GSM services, among other bottlenecks, the CBN governor, Mallam Sanusi Lamido Sanusi, had insisted that the project would be extended to these states in preparation for a nationwide rollout. The focus, however, is on key commercial and urban centres of Onitsha, Kano, Port Harcourt, Abuja and Aba.
The apex bank cited heavy cash transactions in many of the states’ market or urban centres as the compelling reason for taking the scheme in the areas. But it is feared that the banks will still have to grapple with the traditional banking habits and, sometimes, low literacy and awareness level of the majority of businessmen in some of those states, many of whom are yet to understand the details despite the CBN’s campaign.
A big chunk of the rural population in communities that feed into the commercial/ urban areas in most of the selected states remain semi-literate, sometimes completely operating outside of the formal banking system.
“For this reason, we are educating our customers, said an official of one of the new generation banks in Lagos.
Asked to explain what the policy portends for those that would, henceforth, need banking services in the designated areas, she said new cash deposit and withdrawal benchmarks of N300,000 (for personal accounts and N3 million (for corporate accounts) will now be applied in the affected areas.
Also, third-party cheques in excess of N150,000 can no longer be “cash-drawn” over the counter, even as she explained that “although you can use your ATM card to do transactions on a Point of Sale (POS) machine and other electronic/internet channels, you can no longer do more than N150,000 cash withdrawal with your ATM card in a day.”
Meanwhile, World Bank’s Payment Systems and Remittances Specialist, Carlo Corazza, said ‘revolution’ in global payment system has resulted in great savings, which are significant for development purposes.
Corazza made the disclosure at the conference on cash-less initiative, organised by DeNovo Limited and Reach Legal Consulting, in conjunction with the CBN, in Lagos.
“Going electronic,” he said, “can save about 75 per cent of costs usually associated with cash-based regime, which is huge, especially in this era of stretched resources, urging stakeholders to support the scheme.
According to him, the system has also lowered the costs associated with physical barriers in international trade, making it easier for access to financial services in various countries, another positive signal in international cooperation.
But Deputy Governor, Operations, CBN, Tunde Lemo, who was represented by the Director of Banking and Payments System Department, Dipo Fatokun, said the initiative became necessary, given the fact that an efficient payment system enhances financial inclusion, effective transmission mechanism of monetary policy and overall financial stability.
“This is because the cost of cash and associated risk of a cash-driven economy to Nigeria’s financial system were high and in response to these challenges, CBN and the Bankers’ Committee initiated the ‘Cash-Less Nigeria’ project with the pilot run in Lagos and now to be extended to five additional states- Abia, Anambra, Ogun, Kano, Rivers and Abuja by July 1.
“Just this month, we went live on cheque truncation nationwide, thereby making cheque payments to clear within a clearing cycle of T+1. The CBN has licensed about 18 mobile payment operators to offer payment services via the mobile phone that over 100 million Nigerians carry.
Fatokun added that the cash-less policy was designed to promote financial intermediation and inclusion, minimise revenue leakages and increase revenue generation, as well as reduce incidences of robbery and amount of cash payments in the system by encouraging electronic payments.
The policy on withdrawal allows individual customer to make cumulative withdrawal of N500, 000 daily across the counters and the ATM. “Withdrawal above this limit will attract the payment of a processing fee of three percent for the amount above the limit,” the official said.
“Corporate customers are allowed to make cumulative withdrawal of N3, 000,000 daily. Withdrawal above the limit will attract a processing fee of five percent.
“The policy on lodgment allows individual customer to make cumulative lodgment of N500, 000 daily. Lodgment above the limit will attract a processing fee of 2 percent above the limit.
“Corporate customers are allowed to make cumulative lodgment of N3, 000,000 daily. Lodgment above the limit will attract a processing fee of three percent above the limit.
“I need to make it clear that it is the account to which withdrawal and lodgment is made that bears the processing charges and not the individual that receives or deposits the cash.
“Cumulative withdrawal/lodgment means the totality of all withdrawals and lodgments across all the customer’s accounts in the bank.”
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