The Central Bank of Nigeria (CBN) has explained why it
suspended the planned nationwide implementation of the cashless policy in 2017.
Aishah Ahmad, deputy governor, financial system stability
directorate, CBN, spoke on Thursday while briefing the house of representatives
on the cashless policy and the new withdrawal limits.
According to Ahmad, the suspension was to allow more
citizens to fully embrace alternative electronic payment platforms, and ensure
further development and expansion of financial access points.
Ahmad explained that the cashless policy was introduced in
phases, first in Lagos on April 1, 2012, to reduce the use of cash in the
economy, encourage electronic transactions and enhance the efficiency of the
Nigerian payments system.
Following the successes recorded during the pilot phase, she
said the policy was extended to five other states (Abia, Anambra, Kano, Ogun
and Rivers) and the federal capital territory (FCT) in July 2013.
Under the policy, a daily transaction limit of N500,000 and
N3 million for free cash withdrawals and lodgments was imposed for individual
and corporate customers, respectively.
“Processing fees for transactions above the prescribed limit
was fixed at 3 percent and 2 percent for withdrawals and lodgments by
individuals and 5 percent and 3 percent for withdrawals and lodgments by
corporates, respectively,” Ahmad said.
She said, although the full, nationwide implementation
slated for April-October 2017 was suspended at the time, the cashless policy
remained in force in the six states and the FCT.
“In recognition of significant strides recorded in the
transformation of the Nigerian payment system, expansion of financial access
points, financial inclusion and proliferation in electronic banking, the CBN on
September 17, 2019 announced implementation of full cashless policy in the FCT
and the six states (Lagos, Abia, Anambra, Kano, Ogun and Rivers),” Ahmad
explained.
“The CBN also approved the reintroduction of charges on
excess cash deposits by individual and corporate customers above the prescribed
limits that were temporarily suspended in 2017.”
Ahmad said the cashless policy would now be implemented
nationwide by January 9, 2023.
The development, she explained, is in response to the
“significant evolution of the Nigerian payment system and widespread
availability of a plethora of financial touchpoints and electronic payment
options to all Nigerian citizens.”
She further clarified that there are currently no processing
fees applied to cash deposits in order to enable seamless and unrestricted
deposit of any notes affected by the currency redesign.
Ahmad listed the benefits of the cashless policy to include
reduction of cost of cash management (processing, movement, security,
destruction of old notes) which is often passed on indirectly to Nigerians,
including eliminating the physical risk of cash – robbery, kidnapping,
terrorism.
Others are promoting Nigeria’s positive reputation for
fighting money laundering and terrorist financing; deepening the Nigerian
payment system through more innovation and cheaper costs; and more effective
transmission of monetary policies.
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