CBN Scraps Fines for Big Depositors as Naira Scarcity Persists

In a significant move aimed at alleviating the persistent cash scarcity issues plaguing different regions of Nigeria, the Central Bank of Nigeria (CBN) announced on Monday the immediate suspension of the processing fees previously levied on cash deposits exceeding N500,000 for individuals and N3 million for corporates. This development, disclosed in a letter signed by Dr. Adetona Adedeji, the acting Director of Banking Supervision, underscores the CBN’s commitment to addressing the ongoing challenges in the country’s financial landscape.

Cash shortages have been a cause for concern, particularly in the Federal Capital Territory, Abuja, where residents have been grappling with limited access to physical currency. Abigail Ojochenemi, a resident and PoS business operator, expressed her frustration at being unable to withdraw the necessary cash for her daily business operations. She recounted her experience, stating, “This morning, I visited the bank to withdraw money and, to my surprise, there was no money in the ATM machine. When I attempted to withdraw from a First Bank ATM in my area, I was told that the maximum withdrawal is N20,000 per day; this is very bad for my business.”

The scarcity of cash has not only affected individuals but also impacted businesses relying on daily cash transactions. Ojochenemi highlighted the predicament faced by PoS operators, revealing that service providers warned her about meeting weekly transaction targets to avoid potential account closures. She emphasized the urgent need for adequate cash flow to sustain her business operations.

A similar sentiment was echoed by Abbah Friday, a motorist in Apo mechanic village, Abuja, who bemoaned the increased charges associated with cash withdrawals. Friday reported being charged N500 to withdraw N20,000, compared to N200 to N300 for the same amount just a few days earlier. Salisu Ali, a PoS operator in the mechanic village, shared his experience, disclosing that he paid a substantial fee of N1,000 to withdraw N100,000, illustrating the growing challenges posed by the scarcity of physical currency.

Reacting to the CBN’s decision to suspend processing fees, Dr. Uju Ogunbunka, the President of the Bank Customers Association of Nigeria, expressed optimism about the positive impact on cash circulation in the country. In a conversation with The PUNCH, Ogunbunka stated, “You know people have been scampering for cash in the country. Perhaps the CBN felt people don’t want to deposit money because of the charges. If that is the case, more money would come into circulation as the charges are removed.” He further emphasized his belief that the CBN’s decision would help address the current shortage of cash and reiterated confidence that it would not undermine the Federal Government’s cashless policy.

The CBN’s directive extends to all financial institutions under its regulation, mandating them to accept cash deposits from the public without imposing any charges. The suspension of processing fees is set to remain in effect until April 30, 2024. As stakeholders and individuals await the unfolding impact of this policy adjustment, the move signals a proactive response by the CBN to enhance liquidity and mitigate the challenges associated with the scarcity of physical currency in Nigeria.