The volume of cash transactions undertaken outside financial institutions in the month of October 2011 rose by N16.8bn despite measures aimed at making Nigeria run a cashless economy beginning from this year.

According to the Central Bank of Nigeria, the currency in circulation during the period rose by 1.2 per cent over the level at the end of the preceding month to N1.4tn. The apex bank noted that the October result, however, indicated a decrease when compared with results of December 2010.

The bank said, “At N1.359tn, currency in circulation at end-October 2011 rose by 1.2 per cent over the level at end-September 2011. The development reflected wholly the increase in currency outside banks by 2.6 per cent.

“However, it fell by 4.1 per cent over the level at end-December 2010.”

The cashless economy policy of the CBN was slated to commence in Lagos on January 1, but the initiative began on January 3, due to the New Year holidays. A cashless economy is one where purchases and transactions are done mainly by electronic means and seldom by cash.

The policy, introduced by the CBN in April 2011, states that individual and corporate customers are restricted to a daily cash withdrawal and lodgement of N150,000 and N1m respectively.

By implication, individuals, who make cash withdrawals above the limit will be charged N100 on every N1,000, while a corporate organisation that exceeds the limit will be charged N200 on every N1,000.

Meanwhile, the bank noted that total deposits at the CBN amounted to N6.414tn, indicating an increase of 23.3 per cent over the level at the end of the preceding month.

According to the regulatory bank, the development reflected, largely, the 77.9 and 19.9 per cent increase in Deposit Money Banks and Federal Government deposits, respectively.

Source: Punch/Okechukwu Nnodim