The Central Bank of Nigeria (CBN) cashless policy introduced with a pilot scheme in Lagos in January 2012 will be extended to Rivers, Kano, Anambra, Ogun and Abia states as well as the Federal Capital Territory (FCT) with effect from today.
CBN Deputy Governor in charge of Operations, Mr. Tunde Lemo, confirmed that the planned extension of the cashless policy to five states and (FCT) from July 1 still holds.
According to the CBN, the cashless policy aims to reduce the volume of cash based transactions in the economy and the costs of risks associated with such transactions.
Lemo said the five states and the FCT were chosen because of the large volume of cash transactions in their major cities.
He said in order to achieve the objective, the apex bank and lenders had already drawn a road map, which is being followed meticulously.
Lemo said: "We are ready to roll out to six other states and there would be no change in date. We are not shifting the goal post. We have a road map, which is being followed and we are fully prepared."
Following the extension of cashless policy to the six more locations, banks have been sending messages to their customers in accordance with the CBN directive.
According to the CBN what happens in the new locations will be a replication of what is happening in Lagos, where Cash In Transit (CIT) and cash pick up services are no longer be provided by banks. Only licensed CIT companies are allowed to provide these services.
"Also all third party cheques above N150, 000 shall not be eligible for encashment across the counter. They will be paid into an account to receive value through the clearing house. The maximum daily cumulative cash withdrawals and deposit transactions for both individual and corporate accounts would be N500, 000 and N3, 000,000 respectively. There would be a charge for cash withdrawals and deposits exceeding this limit.
"For individual withdrawal above N500, 000 such transaction attracts three per cent of amount above limit only, while deposit attracts two per cent amount above limit only, while corporate withdrawal of amount above N3, 000,000 limit attracts five per cent and in the case of deposit it attracts three per cent on the amount above the limit," CBN said.
Major motivation for the cashless policy extension to other location is perhaps the success the policy has recorded in Lagos.
For instance, following the introduction of the policy in Lagos, CBN disclosed recently that the total value of electronic funds transfer in country has risen to N80 billion daily.
This, according to the apex bank, showed the growing acceptance of the policy by many Nigerians.
Lemo explained that the Nigeria Interbank Settlement System (NIBSS) recorded over N20 billion daily transaction by value, while the Nigeria Electronic Funds Transfer (NEFT) conducts about N60 billion transactions daily.
NIBSS provides the infrastructure for automated processing, settlement of payments and fund transfer instructions between banks, discount houses and card companies in Nigeria.
Lemo noted that both the value and volumes of cash transactions executed through the NIBSS and the NEFT have doubled when compared to the use of cheques.
He said: "We have forgotten that the cashless also include high volume payment transactions such as the NIBSS Instant Payment (NIP). The NIP now moves between N20 and N40 billion worth of transactions daily.
"The cashless Lagos also includes the NEFT. Through NEFT, we also have tens of thousands of transactions valued over N60 billion daily. So between NEFT and NIP, we have transactions now that have more than doubled the cheque transaction volume."
Lemo, who said the CBN is working in collaboration with the Bankers' Committee and other institutions like the Nigeria Interbank Settlement System (NIBSS), said the success recorded in Lagos would be replicated in other locations.
The cashless policy, however, has its challenges. For instance, of over 150,000 Point of Sales (PoS) machines in Lagos, only 25 per cent of them are active. This has affected the rate at which those machines are used.
But Lemo said the challenges are being overcome.
He said: "We believe very much that it is getting better because we monitor the transactions on daily basis and we are beginning to record large volume and value of transactions done under the Point of Sales (PoS).
National Mirror