Respite is underway for the banking public as the Central Bank of Nigeria (CBN) will soon review upwards the current N500,000 and N5 million transaction withdrawal limits for individuals and corporate bodies respectively. 

The apex bank is also harping on the need for more Nigerians to embrace banking culture and the elimination of payment of subsidies on transactions of high net-worth individuals by the banking population, pointing out that these are the basis for the commitment of CBN to the cash-less policy. 

The CBN Governor, Sanusi Lamido Sanusi, who stated this at the on-going seminar for financial journalists in Akure, Ondo state capital also disclosed that the bank is targeting 50 million Nigerians into formal banking system, saying that the policy will expand, deepen and moderate the payment system. 

Chide Umeano, head, shared services office, CBN, explained that the first review was at the instance of feedback from consumers and also “Lagos State government which complained of the initial amount since transactions involve people from outside Lagos”. The review, he added, would take place in January 2013. 

But, Umeanor, who also hinted on the termination of exemptions granted to Ministries, Departments and Agencies (MDA), said the essence of the policy is to encourage e-payment transactions by all. 

“The increase in the limit, in the first instance, from N200, 000 and N2 million, was based on CBN’s feedback system and complaints from Lagos State government. But the current limit will be reviewed again in January,” Umeano said. 

Although he was non-committal on the exact figures, the banker said the action would be part of CBN’s response to complaints and its readiness to ensure success of the policy. 

Sanusi, who was represented by Sam Olofin, board member of CBN, at the seminar in Akure, said the policy creates a more stable pricing system and curbs inflation, which he regards as impediment to the growth of the economy. 

“In a recent survey carried out by CBN, we discovered that only 10 percent of daily banking transactions are above N150,000, while 10 percent account for majority of the high value transactions. 

This suggests that the bulk of the banking population subsidizes the costs that the tiny minority (10 percent) incurs in terms of high cash usage. Furthermore, high cash usage results in a lot of money circulating outside the formal sector, thus limiting the effectiveness of monetary policy. 

“We have commenced a financial inclusion programme that will bring at least 50 million more Nigerians into the formal banking system in the next eight years. 

The cashless policy will help achieve the CBN’s objective of expanding, deepening and moderating the payments system in Nigeria and also galvanize the CBN in ensuring that Nigeria ranks among the top 20 economies of the world in line with the nation’s Vision 2020 aspirations”, the governor said. 

However, Okwo Joseph Nnanna, former director of CBN, said the apex bank can only achieve this if its autonomy is maintained, adding, “an independent CBN can indeed contribute proactively in enhancing good macroeconomic performance”. 

Rahamath Yusuf-Adeyemi, branch controller, CBN, Akure said the policy is geared towards aligning the nation’s financial system with the rest of the world. 

“The main motives behind the policy are aimed at eliminating or reducing the high cost and high risk of cash handling, high subsidy in cash management, high proportion of fund outside formal banking system and high inefficiency and corruption,” Yusuf-Adeyemi said. 

But analyst said last night that CBN should be more coordinated in its approach to the policy implementation. Specifically, they deplored the different and fragmented approaches by different banks. 

“The policy is for the enhancement of the payment system and financial inclusion. The current competition among banks is unhealthy. It is like the CBN is doing its own and the banks are doing their own separately. 

This is not healthy for the economy. Besides, it shows CBN may have lost grip even as some banks are just wasting funds in the name of enhancing knowledge on the policy,” Friday Ameh, energy analyst said.

Source: Business Day