The Governor of the Central Bank of Nigeria, Godwin Emefiele, has finally bowed to pressure to revise the bank’s cash withdrawal limits policy.
In a circular on Wednesday by the CBN’s Director of Banking Supervision, Haruna Mustafa, the CBN said it had reviewed upwards the maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations to N500,000 and N5m respectively.
The CBN attributed the development to the feedback it got from stakeholders.
For transactions above the withdrawal limits, financial institutions are required to get details of the customers and upload same on the CBN portal created for the purpose.
Such information includes a valid means of identification of the payee (national identity card, international passport, or driver’s license), Bank Verification Number of the payee, Tax Identification Number of both the payee and the payer, and approval in writing by the managing director/Chief Executive Officer of the financial institution authorising the withdrawal.
It was also noted that third-party cheques above N100,000 would not be eligible for payment over the counter, while the extant limit of N10m on clearing cheques still subsists.
The CBN urged banks to encourage customers to use alternative channels (Internet banking, mobile banking apps, USSD, cards/Pos, eNaira, etc.) to conduct their banking transactions.
The CBN also said that it recognised the vital role that cash plays in supporting underserved and rural communities and would ensure an inclusive approach as it implements the transition to a more cashless society.
In an earlier circular it issued on December 6, the CBN had said that with effect from January 9, 2023, the maximum over-the-counter cash withdrawal limit by individuals and corporate organisations per week, would be N100,000 and N500,000 respectively, adding that withdrawals above these limits would attract processing fees of five per cent and 10 per cent respectively.
It further stated that maximum cash withdrawal per week via Automated Teller Machines, from January 9, would be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
The apex bank also directed banks to load only N200 and lower denominations into their ATMs.
Following the previous directive, many stakeholders kicked against it.
The Association of Mobile Money and Bank Agents of Nigeria, said that point-of-sale operators would plan to protest as the policy was targeted at killing their source of livelihood.
The House of Representatives summoned the CBN governor and insisted that the bank must not proceed with its cash withdrawal policy.
POS operators react
The Association of Mobile Money and Bank Agents in Nigeria, Victor Olojo, said the CBN’s decision to review the policy was commendable. However, he lamented that it took a national outcry to get the attention of the management of the apex bank.
He said, “This is a victory for small business holders, market women, and those trying to make a living out of the difficult state our politicians have made this country become. I mean, I don’t understand why this should have been the first approach the CBN should have used.
“Why would they single-handedly take a decision that concerns the whole of Nigeria without consulting the stakeholders involved? I mean, this is bad; what they are doing and what’s happening now is what should have been done first. They should get feedback from the people; there should be a mechanism to feel the Nigerians’ pulse. The CBN is totally disconnected from the economic realities.”
The President of the Bank Customers Association of Nigeria, Dr Uju Ogunbunka, explained that the new review is a good signal that the CBN is empathetic towards the plight of the masses.
“This is very good for the economy and financial services sector because if you do not have listening ears and cannot comprehend the issues that people are raising, then if there is a problem, you will bear it alone. But we can see that the CBN has listening ears, but whether what they have done is good enough from what it was, then that is a different thing.”
Ogunbunka added that unearthing the further details of the policy could be deliberated on later.
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Also, the Lagos State Chairman of the Nigerian Association of Small and Medium-scale Enterprises, Dr Adebayo Adams, noted that the new move would ease business activities for individuals and businesses not fully integrated into the cashless policy system.
“A lot of people with petty traders do not have business accounts. So, commercial activities will start picking up, especially during this festive period. This is a welcome idea based on our agreement at the National Assembly,” he said.
Reacting, the Deputy-President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said that while the CBN had the right idea, the execution of the idea did not take into consideration all classes of Nigerians who would be affected by the decision.
According to him, the apex bank ought to have made special exceptions for the class of people who require bulk cash for their day-to-day businesses.
Idahosa said, “It is not the right step in terms of the objectives that the CBN wanted to achieve, but it is a practical response to the complaints. Some of those complaints are legitimate. Some are just facemasks for other motives that the system is trying to curtail.
“For example, the PoS operators who need to carry some cash during the day to serve their customers. The traders in the market who do not have transfer instruments and processes carry a lot of cash. If you look at all these agricultural farm markets, from Lagos here like Mile 12 to larger markets where farm products are brought for sale. A lot of that is done with cash. So, there are some legitimate claims.”
On his part, the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Olusola Obadimu, said that Nigeria had yet to perfect the electronic banking system, and was therefore not ready to transition into the cashless economy the CBN was trying to drive through the directive.
He said, “It (the policy) didn’t make sense, but if they have reviewed it, that’s a nice one. You have to consider the people on the lower end of society who are just trying to survive. Not everybody has a smartphone. Even in advanced countries, we spend cash. Cash is always an option. Electronic payment cannot be the only option. I think it’s a good step in the right direction. That means that CBN is being responsive to good advice. We thank them. We clap for them.”
In the same vein, an economist and former Assistant Head of Research at the CBN, Jonathan Aremu, said the current CBN dispensation had failed to get a grip on its monetary policy. He added that the CBN governor’s involvement in partisan politics had also negatively affected the performance of the apex bank.
He said, “It is really disappointing that the CBN did not calculate things very well. There’s confidence being lost every day with respect to the integrity of the Central Bank. It is not because of the pressure but because the policy has political undertone because he is a member of the APC.
“I was talking to the media yesterday on the African Continental Free Trade Area and I said that the most dangerous thing is for the Central Bank Governor to be a member of politics. The trust is gone. The reputation of the bank is going down, and this is not good. If it was the Central Bank that I know, they would have calculated very well before they came up with the policy.
“In the rural area where there is no electricity, you said they shouldn’t hold money. They don’t have bank branches. They have to travel by okada to where they can get a bank.
UK lawmaker advises
Democrats and the political elites should join Federal Government in supporting the independence of its institutions including the CBN as the country prepares for the 2023 general elections, a member of the House of Lords in the United Kingdom Parliament, Lord Daniel Hannan, advised on Wednesday.
Lord Hannan, a member of the Board of Trade and Conservative Peer and Baron of Kingsclere, issued the warning while answering questions in the UK Parliament.
He spoke against the backdrop of alleged clandestine plots to arrest and prosecute Emefiele by the Department of State Services over money laundering and terrorism financing allegations.
Hannan said the rule of law, due process and the independence of public officials must be protected by all because they form part of the democratic values that bind together the nations of the Commonwealth.
He faulted the moves by the political class in Nigeria to witch-hunt Emefiele over the redesignation of the naira and the accompanying cash withdraw limits policy.
Hannan said, “I am not Nigerian. It is not for me to say whether it was time for a redesign of naira notes, or whether such a change will make elections cleaner. But I do feel that friends of Nigeria, and friends of Nigerian democracy, should defend the rule of law there.
“At a time when democracy is in retreat globally, we all have a stake in Nigeria’s success. The country is Africa’s greatest economy, Africa’s greatest population and Africa’s greatest hope.
“That is why I have raised the issue of the attempt to detain the Governor of the Central Bank of Nigeria, Godwin Emefiele, in Parliament. And that is why I hope that democrats on all sides will join Nigeria in supporting the independence of its institutions in the run-up to the 2023 election – including, of course, the central bank.”
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