The Central Bank of Nigeria (CBN) has extended the implementation of its cashless banking policy to the capital city, Abuja and five states namely Abia, Anambra, Kano, Ogun and Rivers, starting from today.
The cashless policy has been underway for the past 18 months in Lagos State as a pilot scheme, and had been long planned to be extended to other states, but was severally postponed.
The initial timetable had scheduled June 2012 for the extension, before it was postponed to January 1, 2013, and again, to July 1, 2013, with infrastructural challenges being blamed for the postponements.
The policy places daily limits on amounts that can be withdrawn and deposited by customers over the counter and, upon exceeding such limits, customers would be required to pay certain charges for cash handling on the excess amounts.
For instance, individuals have a daily withdrawal and deposit limit of N500,000 while corporate bodies have N3 million. When these limits are exceeded, individuals will be charged 2 per cent of the excess amount withdrawn and 3 per cent of excess deposit, while corporate bodies will be charged 3 per cent of excess deposit and 5 per cent of excess withdrawal.
Also cash-in-transit lodgment and cash evacuation services will no longer be available to customers or merchants.
Banks had already started sensitising their customers on the spread of the policy to other states, prior to the takeoff of the policy.
One of the banks in its message to customers noted that the “limits apply so far as it involves cash, irrespective of channel, that is, over the counter, ATM, and third-party cheques cashed over the counter, etc. For example, if an individual withdraws N450,000 over the counter, and N150,000 from the ATM on the same day, the total amount withdrawn by the customer is N600,000, and the service charge will apply on N100,000 – the amount above the free daily limit of N500,000.
The apex bank which had earlier in the year announced the spread of the policy to four states — Kano, Anambra, Abia states and the Federal Capital Territory (FCT) — had added Rivers and Ogun for the next stop of the cash-lite policy.
Exemptions have however been granted on lodgments and withdrawals for accounts operated by embassies, diplomatic missions, multilateral agencies, aid donor agencies, ministries, departments and agencies of government (revenue collections only), microfinance banks (MFBs) and primary mortgage institutions (PMIs).
According to CBN’s head, shared services, Chidi Umeano, the states and the FCT were chosen because of the large volume of cash transactions in some of their major cities such as Aba, Kano, Port Harcourt and Onitsha.
The cashless policy, which implementation began in Lagos in January last year, is aimed at reducing the dominance of cash in the system. The policy specifies penal charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits.