The Central Bank of Nigeria (CBN) on Tuesday said there will be charges on cash withdrawals and deposits on personal and corporate bank accounts.
According to the CBN in a statement, the move is part of its “Cashless Policy” plan for the country.
“The transactions will attract three per cent processing fees for withdrawals and two per cent processing fees for lodgments (deposits) above N500, 000 for individual accounts,” the apex bank said.
“Corporate accounts will attract five per cent processing fees for withdrawals and three per cent processing fee for lodgments (deposits) above N3 million.”
Concise News learned that the plan was started in 2012 with the charges only restricted to transactions in Nigeria’s commercial capital, Lagos.
One year later, the apex bank took the “Cashless Policy” to other parts of the country: Abia, Anambra, Kano, Ogun and Rivers states, and Abuja.
However, in 2014, the CBN suspended it and noted that it was going for a country-wide implementation of the proposal in 2015.
It said then that this would give room for more publicity and the deployment of the right infrastructure to make the proposal work.
The bank, however, suspended the policy “until further notice” in April, 2017.
According to the statement by the bank on Tuesday, the charges will resume in Lagos, Ogun, Kano, Abia, Anambra, Rivers states and the Federal Capital Territory.
In a memo to Deposit Money Banks (DMBs), the CBN said, “Further to our circular ref BPS/DIR/GEN/CIR/04/004 we write to inform all Deposit Money Banks that the CBN has approved that:
“Charges on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, Rivers states and the FCT, in addition to already existing charges on withdrawals, effective September 18, 2019.”
It added that a “Nationwide implementation of the cashless policy will take effect from March 31, 2020. Please ensure strict compliance.”
Charges Not New
According to a financial analyst Yinka Ogunnubi, the CBN policy is not new and as noted before, had been introduced in certain states in the past.
“The prelude to this new circular was actually one issued in April 2017, where the CBN suspended the new withdrawal and deposit charges nationwide but maintained only the withdrawal processing charges for Lagos, Ogun, Kano, Abia, Anambra, Rivers, FCT,” he said.
He added, “The only thing that has changed is the introduction of the processing fees for lodgments in the selected states. The processing fees for withdrawals remain the same.”
Furthermore, he noted that “For individuals, if you make a deposit of N1m cash in your account, the first N500k will be free but the remaining will be subject to a 2% charge. Meaning you’ll be charged N10,000.
“For Corporates, if you make a deposit of N6m cash in your account, the first N3m will be free but the remaining N3m will be subject to a 3% charge. Meaning you’ll be charged N90,000.00.”
Cash Is Expensive
Ogunnubi stated that “Cash is expensive. Go anywhere in the world, you are charged for deposits.
“It is punitive alright but it is to force you to use electronic means instead of cash. Apart from the high cost of collecting and processing cash, there is also the high risk of transporting them.”
The House of Representatives on Thursday asked the Central Bank of Nigeria (CBN) to suspend the implementation of a new cashless policy.
Many Nigerians have condemned the policy with Benjamin Kalu raising a motion of urgent public importance.
Kalu said that the policy may have “negative impacts on micro, mini, small and medium enterprises.”
According to Kalu, (APC, Abia) the policy “is aimed at enriching Nigerian Money Deposit Banks owned by a privileged few; without any known financial contribution to the consolidated revenue fund of the federation.”
The House of Reps further criticized the CBN for not prioritizing the needs of the citizenry before promulgating the directive “even as Section 14(2)(b) of the Constitution provides for the security and welfare of the people.”
As a result, the House urged the CBN to “suspend the implementation of the cashless policy on deposits until the extensive consultative process is concluded.”
It mandated the Committee on Banking and Currency to interface with the CBN, also.
This is to ascertain the actual need and relevance of the policy considering the prevailing economic condition of the country.