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Cashless Policy: Business Owners Intensify Pressure

22 Jul 2012

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CBN Governor, Sanusi Lamido Sanusi


By Festus Akanbi
As robbery attacks on business outlets in various parts of the country escalate, there are indications that the Central Bank of Nigeria (CBN) is under fresh pressure to tamper with the threshold set for daily withdrawal and lodgement for corporate customers in its cashless policy.

According to the policy, commencing from June 1, a daily cumulative limit of N500, 000 and N3 million on free cash withdrawals and lodgements by individual and corporate customers respectively was approved by the CBN.

However, industry sources said that although the policy is expected to be reviewed in every six months, the rising vulnerability of some business premises, especially those who generate more than N3 million daily to robbery attacks has put more pressure on the apex bank to review the policy.

THISDAY checks showed that affected business premises included filling stations, shopping malls, among others are finding it difficult to lodge proceeds of their daily sales to banks in order to avoid payment of fines slammed on those that contravene the CBN rules on cashless policy. According to the policy, individuals and corporate organisations that make cash transactions above the limits will be charged a penal fee of N20,000 and N30,000 respectively for deposit amounts above the cumulative limits, as well as N30,000 and N50,000 respectively for withdrawal amounts above the cumulative limits.

For instance, a manager with a filling station located in Fagba area of Lagos, which had been constantly attacked by men of the underworld this year disclosed that the limit placed on daily lodgement in banks is discouraging many business owners from taking their proceeds to banks on a daily basis, a development he blamed for incessant robbery attacks.

However, Head, shared service office of the CBN, Mr. Chidi Umeano blamed lack of understanding of the cash policy for the apprehension expressed by business owners. Addressing business editors and financial journalists in Akure, Ondo State last week, Umeano, whose office coordinates the implementation of cashless policy blamed other factors like resistance due to prevailing cash culture, the level of infrastructure, and exorbitant charges on e-payment product among others for the rising complaints over the cashless policy.

Reacting to the reluctance of some business owners to key in into the policy, Umeano said the challenges being faced by owners of business premises which generate high turnover will at the end of the day encourage them to adopt the policy.
The CBN had in January launched the cashless policy in Lagos as a pilot scheme, with a plan to launch it nationwide in 2013.

Meanwhile, the CBN Governor, Sanusi Lamido Sanusi has assured that the cashless policy will not hurt the low income group adversely. “There is a subsisting myth that the cashless policy will hurt the low income group adversely. In truth though, many of them cannot, with the volume of their transactions, qualify for the cost that the cashless policy attracts,’’ he said

Represented by Mr. Sam Olofin, a CBN board member, Sanusi said that a recent survey carried out by the bank indicated that only 10 per cent of daily banking transaction was above N150, 000. According to him, 10 per cent accounts for majority of the high value transactions.

This, he said, suggested that the bulk of the banking population subsidises the costs that the tiny majority incurs in terms of high cash usage, resulting in a lot of money circulating outside the formal sector.

Sanusi said though the policy had challenges like every other policy, the banking penetration level in the country was still low and needed to be improved.
Commenting on the benefits of the policy, he said that the cardinal strategies of the programme aimed to reduce drastically the volume of cash in circulation in favour of electronic form of transaction.

“The cash policy will help achieve the CBN objective of expanding, depending and modernising the payments system and also galvanise the CBN in ensuring that Nigeria ranks among the top 20 economies of the world by 2020.”

Sanusi said the CBN cashless policy was designed to break the traditional barriers hindering financial inclusion for millions of Nigerians and bring low-cost, secure and convenient financial services to urban, semi-urban and rural areas across the country.
He urged the media to join the apex bank in its effort to educate Nigerians on the importance of the policy to the economy.

Tags: Nigeria, Featured, Business, CBN, Cashless Policy

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