CBN’s Hasty Cash-Less Policy

Editorial

Editorial

The Central Bank of Nigeria, CBN, cashless policy which it began implementing in Lagos from the beginning of January this year, continues to generate ripples among the populace.

Under the policy, the minimum cash lodgement and withdrawal in banks by individuals and corporate organisations are pegged at N150,000 and N1 million daily respectively. To enforce the new rule, a ‘cash handling charge’ is to be paid by individuals or corporate bodies who exceed their daily withdrawal or cash deposit limits.

The CBN says it wants to use the new policy to reduce the amount of physical cash in circulation in the economy, and encourage more electronic-based transactions (payments for goods, services, transfers, etc.). In the same vein, the apex bank hopes the system can help cut banks’ operating costs.

Few weeks after the introduction of a pilot scheme of the policy in Lagos, it doesn’t seem to be flying as banks and customers have largely been carrying on with business as usual.

The reasons for this may not be far-fetched given the inherent socio-cultural factors that need to be addressed before such policy should have come on stream. The CBN failed to realise that the Nigerian economy is heavilly cash-based. It requires some time for adaptation for the change it desires to happen.

Lofty as the intentions of the CBN’s cash-lite policy are, the apex bank seems to be putting the cart before the horse in the manner it is implementing the scheme.

Related News

Before kick-starting the policy, the CBN failed to address the lack of POS terminals at most sales outlets, low awareness, the low literacy level among the citizens, unreliable communication system and poor or non-existent infrastructure in many communities.

The 31 March deadline it set for enforcing penalties for paying or lodging above the limits, is also too punitive as the public requires more time to properly get used to the new system.

The cash withdrawal/lodgement daily limits are unrealistic and too small, since the daily transactions of many traders exceed the sum, while it serves as disincentive to corporate organisations.

With many ATMs often failing to dispense cash, and the grossly inadequate Point of Sales (POS) terminals, needed to encourage electronic transactions the future of the policy looks uncertain. The CBN’s pronouncement of deploying 40,000 PoS terminals to drive the ‘Cash-less Lagos ’ project to ease transactions, alongside other electronic payment options seems not to have been implemented as only outlets in highbrow areas boast the equipment.

With the apathy with which the policy has largely been met so far, the project might hit the rocks unless the CBN reviews the policy and address the grey areas that have manifested from the Lagos scheme.

Load more