As the full implementation of the cashless policy begins today

In 2012, the Central Bank of Nigeria (CBN) led by Sanusi Lamido introduced a cashless policy with the aim of reducing the amount of physical cash used in the system in a bid to reduce banks’ cash handling expenses. .

The policy was also aimed at getting more money into circulation in the system, as well as tracking money laundering activities.

The cashless policy, at the time, prescribed processing fees on daily cash withdrawals and cash deposits that exceeded N500,000 for individuals and N3 million for corporate entities. The prescribed processing fees are three percent and five percent on withdrawals by natural and legal persons, respectively, while deposits/presentations are charged two and three percent also for natural and legal persons, respectively.

Although, the policy had come into effect in seven states, viz; Lagos, Abia, Anambra, Kano, Ogun, Rivers and Abuja, the CBN, in August 2015, suspended the policy to allow banks to implement the technology that would allow the policy to work smoothly.

Since 2015, the technological advancement in the Nigerian banking industry has grown exponentially to become one of the best in the world.

In October 2022, CBN Governor Godwin Emefiele stated that the main bank is committed to making Nigeria 100 percent cash free.

According to him, since then all the necessary infrastructure has been put in place to ensure a smoothly running cashless system, such as CBDC, online banking, Payment System Banks (PSBs), Point of Sale (POS) terminals, retail banking, etc. agents, mobile banking and ATMs.

“As far as I am concerned, the destiny is to achieve a 100% cashless economy in Nigeria. I know those who doubt us will say that 100 percent cashless is unachievable. Yes, that’s right, but Nigeria needs to move from being a predominantly cash economy to a predominantly cashless economy,” she stressed.

Following this, Emefiele had announced the full implementation of the cashless policy starting Monday, January 9, 2023, which sets a stricter limit compared to the initial limits set when the policy was introduced in 2012 and when the policy was implemented. pilot stage nationwide in 2019. According to the new directive that comes into effect today, Monday, January 9, 2023, individual bank customers are not allowed to withdraw more than N100,000 in cash at the teller, through ATMs or POS in a day. This amounts to N500,000 every week or N2 million in a month. For corporate clients, the withdrawal limit was set at N5 million per week, which translates to N20 million per month.

The circular, which was signed by CBN’s Director of Banking Supervision, Haruna Mustafa, also set a limit of N100,000 on third-party checks at the teller window. “Third party checks above N100,000 will not be eligible for cash pickup, while the existing limits of N10,000,000 on check clearing still apply.”

In accordance with the CBN’s plan to ensure that higher denomination notes are used only as store of value as there will only be more lower value notes in circulation, the main bank had mandated that compared to N1,000 and N500 banknotes dispensed at ATMs across the country, Naira denominations of N200 and below should only be loaded at ATMs. This would mean that N500 and N1,000 notes can only be cashed over the counter in bank rooms or at POS points.

While the amount of cash that can be withdrawn at the counter was limited to N100,000 per day, the amount that can be withdrawn from ATMs and outlets was limited to N20,000 per day.

However, the main bank noted that in exigent circumstances where a cash withdrawal in excess of the limits is required for legitimate purposes, such requests will be subject to a three percent processing fee and five percent for individuals. physical and legal, respectively.

In another to be able to exceed the limit, the main bank said that financial institutions must “obtain the following information from the client, as a minimum, and upload it to the CBN portal created for the purpose: Valid means of identification of the beneficiary (DNI, International Passport or Driver’s License), Bank Verification Number (BVN) of the beneficiary, Tax Identification Number (TIN) of both the beneficiary and the payer, and Written approval from the MD/CEO of the financial institution authorizing the withdrawal.

The circular also stated that banks must submit monthly returns on cash withdrawal transactions above the specified limits to the Departments of Banking Supervision, Supervision of Other Financial Institutions and Administration of the Payment System, as appropriate.

Meanwhile, POS operators are looking for new ways to serve their customers and circumvent the N20,000 limit imposed on withdrawals via POS. A POS operator who spoke to Leadership said he doesn’t expect the service to affect his business. According to him, his service provider has provided an alternative means to allow people to withdraw more than N20,000 in a day.

“The new application that the provider submitted at the end of December last year allows someone to withdraw more than N20,000.

more security and the BVN and biometrics of the person are taken before making the withdrawal ”, he explained.

Another POS operator said it will encourage its regular customers to make transfers instead of using their cards for withdrawals if they want more than N20,000. “I don’t think the policy really affects my business,” he said.