Cashless Policy Boosts Activities In Money Market


The Nigerian money market witnessed increased activities in April with the take-off of the pilot stage of the cashless policy of the CBN.

The News Agency of Nigeria (NAN) reports that the full implementation of the policy across the country has been scheduled for January 1, 2013.

NAN reports that the take-off of the policy in Lagos was not without hitches as some traders complained about non-availability of the Point of Sales (PoS) machines.

Some operators also complained that poor infrastructure in the country was affecting smooth operation of the new system.

The Nigerian Inter-Bank Settlement System (NIBSS) said that it had connected a total of 30,000 PoS to its central switch service in 2011.

Its Acting Chief Executive Officer, Mr. Niyi Ajao, said that the organisation planned to add additional 20,000 machines by the end of May this year.

Ajao also said that the organisation had overcome the connectivity challenge among banks, adding that merchants could now lodge money into their accounts real time.

He also disclosed that although banks were increasing the purchase of the PoS terminals, but its effect had not been felt because majority of them had not been connected to its network.

The CBN, however, said that in spite of these hitches it would go on with the implementation of the policy.

The apex bank, on March 26, announced the enforcement of prescribed limits on cash deposits and withdrawals as stipulated by the policy.

The policy stipulates that cash deposits and withdrawals above N500, 000 for individuals and three million naira for corporate accounts would attract charges ranging from three to five per cent from Monday, April 2.

During the month, the CBN sanctioned the Stanbic IBTC Bank.

The bank was fined N47.71 million for allegedly contravening some provisions of the Commercial Agricultural Credit Scheme (CACS).

The CBN alleged that N470 million was withdrawn from Stanbic IBTC Bank by one of its customers which contravened the CACS guidelines.

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Another major development in the market in April was the release of audited result of some banks for their financial year ended December 31.

Fidelity Bank declared profit after tax of N5. 36 billion for the year against N6.11 billion it posted in 2010.

Its profit before tax stood at N7. 67 billion compared to the N8. 65 billion declared in 2010, a decrease of 11.3 percent.

Its fixed assets rose by 6.9 percent to N27.03 billion from the N25. 27 billion recorded in 2010.

The bank’s net assets increased to N137.48 billion from N136. 18 billion recorded in 2010.

It proposed a dividend of 14 kobo per share to its shareholders.

Skye Bank’s profit after tax for the financial year dropped by 50.3 percent to N5.18 billion from N10.43 billion posted in 2010.

Its gross earnings stood at N104.8 billion against N83.9 billion in 2010, an increase of 19.9 percent.

NAN reports that the bank proposed a dividend of 25 kobo per share to shareholders.

Mr. Wole Olowu, the General Manager, Regency Assets Management Ltd., commended the CBN for the implementation of the cashless policy.

He appealed to the Federal Government to provide adequate infrastructure for the success of the policy across the country.

Olowu said that the sanction on StanbicIBTC Bank would ensure stability in the financial system.

The manager also commended the impressive results declared by the banks, “especially now that many companies find it difficult to pay dividends to shareholders.”

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