The Bankers Committee has said that the currency restructuting exercise especially the planned introduction of the N5,000 note will help banks reduce interest rate.

This was the position of the committee at the end of its 309th meeting on Tuesday in Abuja.

Addressing journalists at the end of the meeting the Managaing Director of United Bank for Africa, Mr. Philip Oduoza said lower interest rate would be achieved when all the cost savings from the exercise had been passed to bank customers.

He said, ““one of the things that leads to high interest rates is the cost of operations so as that goes down you will find that the benefits will also go to the customers.

“All the cost savings from the restructuring will eventually be passed on to the customers leading to reduction in interest rates.

“N5000 will definitely reduce cost of doing business in the system. The cost that will be saved by the banking industry from the introduction of N5000 notes will eventually trickle down to the customers. The lending rates of bank is made up of many components once this goes down you will see it  appear in lending rates if all things are equal. It will be beneficial to the industry, the government and the customers.”

He said the move would also help to ensure efficiency of the country’s payment system adding that “the currency restructuring of the CBN makes more sense because fewer higher denomination currencies will now fit into Automated Teller Machines, moving cash between locations will result in less number of runs for the banks.”

He, however, pointed out that the apex bank and Deposit Money Banks would not impose the N5000 notes on anyone.

Also speaking, the Director Corporate Communications, CBN, Mr. Ugochukwu Okoroafor, defended the conversion of N5, N10 and N20 notes into coins adding that unlike the notes, the coins last for a longer period.

On the recent allegation by the Economic and Financial Crimes Commission that banks were frustrating its fight against money laundering, Okoroafor said the apex bank had done a lot to champion anti money laundering and through its Know Your Customer programme.

He exonerated the banks of any wrongdoing stressing that they (bankers) had been reporting suspicious transactions.

“Suspicious transactions are reported and eliminated and only good customers are brought into the banking system, the reports are being filed, as an industry we would like to engage the EFCC to know the specific areas,” he added.

He said the bankers committee had a standing committee that carried out financial literacy and awareness to both customers and staff adding that the banking industry would work together with EFCC to find out the specific areas that needed to be addressed.

Source: Punch/Ifeanyi Onuba