The Bankers Committee and the Central Bank of Nigeria (CBN) have agreed to go nationwide with the cashless policy as well as move the cash reserve ratio (CRR) on public sector deposits to 100 per cent if the foreign reserves weaken  and there was not enough dollars to defend the currency.

Speaking after the 315th meeting of the Bankers Committee meeting held in Lagos yesterday, the managing director and chief executive of First Bank Nigeria Limited, Mr Bisi Onasanya, explained that although it was the decision of the Monetary Policy Committee (MPC), it was discussed at the Bankers Committee meeting that the CRR on public sector deposit be moved to 100 per cent if there was no improvement in the level of the foreign exchange reserves.

“We have seen statistics from the CBN that the continual reduction in the balance of foreign exchange reserves and when you are confronted with that, the only option available is that you tighten until you see a reverse to that in terms of accretion to reserves.

“So what the CBN has done is to use the tool and once you move from 50 to 75 per cent, there is only a limit to how far you can go, the worst case is to move to 100 per cent. The group discussed the possibility of moving it to 100 per cent, it is an MPC decision, but it was discussed that if we have to move to 100 per cent, if we do not see improvement in the forex earning, CBN made it clear that we will move to 100 per cent,” Onasanya noted.

He explained further; “There is no country that will just allow its exchange rate to be left without being managed so the mere fact that those actions have been taken indicate that the CBN and the MPC are willing to do everything within their powers to ensure the currency is not left to be devalued.”

Meanwhile, the Head of Shared Services of the CBN, Chidi Umeano informed that the success of the cashless policy at the pilot stage and the six other states had informed the nationwide commencement of the policy with effect from June 30/ July 31, 2014. Umeano explained that statistics show that Nigerians have shifted from the traditional carrying of cash to doing transactions through various electronic means.

He noted that as at Monday, February 10, 2014over N240 billion had been transacted through electronic means. According to him, about N153 billion had been transacted through NEFT, while N37 billion was transacted through NIP. Point of sale terminals he said had recorded a total transaction of N50 billion just as N12 million was transacted through mobile money.

Source: Leadership (by Bukola Idowu)