Godwin Emefiele, CBN governor


More reactions have continued to pour in as market stakeholders chew on the Central Bank of Nigeria’s sudden re-introduction of charges on the deposit and withdrawals on sums above N500,000 to promote a cashless economy.

The CBN had through a circular earlier in the week, directed all deposit money banks in the country to charge 3% processing fees for withdrawals and 2% for deposits of amounts above N500,000 for individual accounts. Corporate account holders will be charged 5% processing fees for withdrawals and 3% for deposits of amounts above N3 million.

The directive is effective from Wednesday, September 18, 2019.
The directive will apply to banks in Lagos, Ogun, Kano, Abia, Anambra, Rivers, and Abuja.

It will apply to other states from March 31, 2020.

The apex bank explained that the policy was to enhance electronic banking which many Nigerians are seemingly averse to.

However, since its announcement many Nigerians have been reacting to the policy which came to them as a surprise.

A Lagos based Investment and Business consultant, Dr. Vincent Nwani, said whereas he supports any policy measure that would further enhance cashless economy, the sudden manner the apex bank re-introduced the charges was rather anti-people.

Nwani who spoke in a telephone interview with Business Hallmark, noted that the CBN should have given a little time to enlighten the banking public to enable them plan and key into the process instead of making a policy today and insisting on its implementation the next day.

He accused the apex bank of indirectly creating an avenue for Deposit Money Banks to make hot money from their customers.

According to him, apart from failing to inform and educate the people on the policy, the charges are a little high despite its use as a deterrent to customers who may have refused to key into the cashless economy.

“A deterrent that is taking taking N10,000 from every N500,000 paid and N15,000 from every N500,000 withdrawn,” Nwani explained, “is like using a sledge hammer to kill mosquito.

‘’A lot of businesses do not even make up to that amount as profit. It is important that we apply the cashless policy to support our business and the economy’’, he said.

Dr. Nwani argued that recent policies of the government have been driven by the motive to generate more revenue from  the people without any consideration for their welfare in a society where poverty is so high.

Also commenting on the issue, Dr. Boniface Chizea said that the policy was laudable and would not have any negative impact on the drive for financial inclusion, noting that up to 98 per cent economic agents may not deal in such volumes of cash given the level of penetration of technology based electronic payments system.

He cautioned that high volume of cash was prone to encourage robbery and undermined the clean notes policy of the CBN aside from increasing the cost of banking services in terms, of man hours that are wasted during banking transactions.

He reminded people that the cashless policy was targeted at encouraging the use of electronic channels which was announced on April 2011which was commenced with pilot scheme in Lagos which took off from 2012.

‘’Some of the objectives attached to the cashless policy such as the attainment of modernization of the country’s payments system and enhancing of the effectiveness and efficiency of monetary policy would also be undermined’’, he said.

In February 2017, the apex bank had announced its intentions to introduce charges on cash transactions involving huge amounts across the country.
At the time, deposits in individual accounts ranging from N500,000 to N1 million was to attract a 1.5% charge, while withdrawals within the range attract 2% charge.

Deposits of amounts above N1m to N5m were to attract 2% while withdrawals attract 3% charge. Deposits and withdrawals above N5m were to attract 3% and 7.5% charge respectively.

In the corporate category, deposits and withdrawals between N3m and N10m were to attract 2% and 5% respectively, while deposits and withdrawals between N10m and N40m attract 3% and 7.5% respectively. Deposits and withdrawals above N40m were to attract 5% and 10% respectively.

The directive was suspended in April 2017 and refunds were made to customers