Stakeholders kick against N150,000, N1m transaction limit 
…As cash-lite Lagos policy come under scrutiny
As Lagosians and, indeed, Nigerians look forward to the successful implementation of the Cash-lite Lagos, which began January I, 2012, one question on the lips of many people is what happens after March, when CBN would commence charging for deposit or lodgments above the N150, 000 and N1million by individuals and corporate organisations, respectively.
Analysts have expressed doubts over the readiness of banks and their customers for the new policy. It has been business as usual by banks and their customers, a development, pundits regard as dangerous since customers are not practising the policy. “How will they imbibe the tenets and therefore brace up for the sanctions by April?” they wondered.
There is no doubt that CBN and banks have shown clear commitment and demonstration to make the policy work. Some of these measures include full implementation of the Nigerian Uniform Bank Account Number Standard (NUBAN) scheme; getting the Federal Government to issue directive to its Ministries, Departments and Agencies (MDAs) to replace all forms of cheque payments with electronic payments.
Others include licensing of 11 Mobile Payment Service Providers (MPSP); registration of companies providing cash-in-transit and currency sorting; moves to review the Evidence Act, and reversing its earlier directive to banks to withdraw their offsite ATMs in airports, hotels and eateries, among others.
But, barely one month into the policy in Lagos, the scheme may have ran into brick walls as it is fraught with unmitigated confusion with both banks and customers displaying palpable ignorance of what the policy entails.
They are also querying the set cash limits applying to an account, irrespective of channel, such as over the counter, ATM, 3rd party cheques encashed over the counter, Master card, among others.
Their argument is that the policy is anti-investment and aims at punishing hard work that produces more cash for daily business people, while at the same time, could starve some sectors of daily cash for business.
They recall their harrowing experiences during the last strike called by labour and civil society as the ATMs failed to dispense cash, saying with dearth of the ATMs, Point of Sales (POS) terminals, coupled with the fact that most banks do not have electronic products, the future of the policy is uncertain, adding that the only way out is for the authorities to further postpone the implementation of the punitive aspect of it after the March deadline and go back to the drawing board.
The only way out, according to some of the customers is to ignore it, while some are calling for upward review of the limit and further postponement of its implementation.
Johnson Chukwu, managing director and chief executive officer, Cowry Asset Management Limited, did not mince words when he told BusinessDay at the weekend that the only way out was for the policy to make provision for the maximum withdrawal amount to be increased to N500, 000 and N2million for individuals and organisations, respectively.
His words: “The major challenge with the Cash-lite policy is that it involves a culture change, which will naturally take sometime to gain societal acceptance. Such transformation policy, although plausible, needs gradual introduction. At present, the Cash-lite policy is faced with several challenges among which are lack of access to bank accounts by a greater percentage of Nigerians, the absence of POS terminals at most sales outlets, the low literacy level among the citizens, absence or unreliable communication infrastructure in rural areas, etc.
“In view of these challenges, I will suggest that Central Bank increase the maximum amounts that can be withdrawn daily without penal charges by individuals and corporate organisations to N500, 000.00 and N2million respectively. It can then subsequently reduce the amounts progressively as the bottlenecks are addressed.”
They argue that one basic fact about the Nigerian economy that cannot be wished away is that there are some daily cash-based transactions, which requires more time for enlightenment for adaptation. In fact, customers said despite the postponement of sanctions, the cumulative cash withdrawals/lodgment daily limits are punitive and too small as they claim that even daily transactions of some traders have gone beyond the amount, while it serves as disincentive to corporate organisations.
More worrisome is the fact that the limit also applies to collection accounts and cash brought through Cash-In-Transit (CIT) licensed companies, as the CIT Company only serves as a means of transportation.
BusinessDay investigations revealed that the service charged for daily cumulative deposits above the limit into an account shall be borne by the account holder, while the service charge for daily withdrawals above the limit into an account shall be borne by the account holder.
The general feeling is that with the ‘business as usual’ approach by both the banks and customers and the ravaging ignorance, the policy, an initiative of Bankers’ Committee, comprising the CBN, NDIC, the discount houses and the 24 deposit- taking banks may be heading for a major disaster unless the authorities go back to the drawing board.
Salami Abiodun, a customer of one of the banks on Allen, Ikeja, said: “There is confusion everywhere as even the banks do not have answers to most questions. Yesterday, I was refused withdrawal of about N200, 000, but today, they are counselling me that I could continue withdrawing any amount until April.”
The policy, which is the migration from cash-based economy to electronic payment channels, aims at curbing some of the negative consequences associated with the high usage of physical cash in the economy, including high cost of cash management; high risk of using cash; high subsidy; checking high cash usage at the informal sector and inefficiency and corruption which allows leakages and money laundering, among other cash-related fraudulent activities.
