A new directive from the Central Bank of Nigeria has directed deposit banks to charge a new processing fee for customer’s cash deposits and withdrawals for upto a certain amount thresholds.
The directive via a circular, dated 17 September and signed by CBN’s Director of Payments System Management Department, Sam Okojere, directed the banks to commence implementation of the policy next day, Wednesday September 18.
“Charges on deposits shall apply in addition to already existing charges on withdrawals, effective September 18, 2019,” the statement read.
The policy now requires a 3% and 2% processing fees for cash withdrawals and deposits of amounts above N500,000 respectively for individual accounts. Corporate accounts similarly will be charged 5% and 3% processing fees for cash withdrawals and deposits above N3,000,000 respectively.
The cashless policy is to be implemented nationwide from 31 March 2020, but is to commence immediately in six designated pilot states, namely, Lagos, Ogun, Kano, Abia, Anambra, Rivers states and Abuja, the federal capital territory.
For a government struggling with liquidity and trying to rein in government costs, the apex bank by this policy may be trying to prod Nigerians particularly the informal sector to prioritize electronic payment systems rather than cash transactions by penalizing customers with the costs of cash production and management.
Electronic payment systems also enhances money trail and tracking for security and anti-corruption purposes.
Opinions however appear to be divided over the CBN’s latest monetary move. Financial analyst and economist, Yinka Ogunnubi, says the cashless policy was infact not a new one, as it actually started way back in 2011.
“The only thing that has changed now is the introduction of the processing fees for lodgements in the selected states. The processing fees for withdrawals remain the same.
“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.”
“Actually the CBN has been very patient on this subject. The cashless policy has been in effect since 2011. It started by the restriction of cash in transit lodgment by banks in Dec 2011 to 3rd party cheques above N150k no longer being eligible for withdrawal over the counter.
“In my opinion, the CBN has given sufficient time to to allow people to migrate to more efficient payments and collection channels. By the time the nationwide implementation takes place in March 2020, it will be at least 8 years of waiting for individuals and corporates to migrate.“
But some other commentators feel differently. Here’s a collection of some tweets from some social media critics of the CBN’s policy.