The Central Bank of Nigeria (CBN) has concluded plans to roll out the cashless policy in Rivers, Kano, Anambra and Abia States as well as the Federal Capital Territory (FCT) from July 1.
CBN Deputy Governor (Operations), Mr. Tunde Lemo, in an interview he granted in Abuja, said that the aforementioned states and the FCT were chosen because of the large volume of cash transactions in some of their major cities such as Aba, Kano, Port Harcourt and Onitsha.
The cashless policy, which began in Lagos in January last year, is aimed at reducing the volume of cash in the system. The policy specifies penal charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits.
Under the policy, the CBN pegged the daily cumulative cash withdrawal or deposit limit for individual accounts at N500,000 per day and N3 million per day for corporate accounts.
Lemo, in the interview, explained that the policy earlier planned to be implemented in other states in January 2013 was deferred due to some infrastructural challenges.
He said: “When we talk about nationwide roll-out, we are also being careful to ensure that we make use of resources in a smart way. Cash doesn’t flow the same volume in every state of the federation. What we would do in July is to look at those other market clusters where large amount of volume is transacted and add them to Lagos.
“It is cheaper that way because the resources you need to cover the entire 923 square kilometres in Nigeria are huge. But you can achieve almost the same thing by looking at the pattern of cash distribution and you can cover about 90 per cent of that by adding about five more locations to Lagos. That is: Abuja, Kano, Aba, Port Harcourt and Onitsha.
“That is basically what we want to do. We would get those five clusters and add them to Lagos. When we add those five locations to Lagos, then we would have covered about 90 per cent of the cash volume. We would see how far that goes and once we perfect that, we then begin to look at contiguous market centres around these locations and we would gradually cover the entire country.”
Lemo while stressing that the cashless policy had been successful in Lagos, stated that at the time the policy took-off last year, there were only about 5,000 units of Point of Sale (PoS) machines in Lagos but that the number has now increased significantly to over 150,000.
“We still have a few challenges, but if I look back, I really would say that we have done a lot to transform the payment system in Lagos through PoS. Of course, when we talk about cashless Lagos, a lot of us only look at the retail side, which is driven by PoS.
“We have forgotten that the cashless also include high volume payment transactions such as the Nigerian Interbank Settlement System (NIBSS) Instant Payment (NIP). The NIP now moves between N20 and N40 billion worth of transactions daily.
“The cashless Lagos also includes the Nigerian Electronic Fund Transfer (NEFT). Through NEFT, we also have tens of thousands of transactions valued over N50 billion daily. So between NEFT and NIP, we have transactions now that have more than doubled the cheque transaction volume,” he said.
Responding to questions on complaints that many PoS in Lagos are non-functional because they are faulty, Lemo said: “Nigerians like to generalise when they say most of the PoS in Lagos are not working! I receive PoS transactions daily and there is hardly any day that we don’t do about 15,000 transactions valued at over N300 billion.
“If most of the PoS machines in Lagos are not working, we would not record that number of transactions. Yes, like I told you before, we still have issues around GPRS and there are certain spots in Lagos that are not well connected. But that is outside of central banking, it is outside of commercial banking, it is all about technology infrastructure.”
Is it because of this cashless policy that we now have shortage of the lower denominations?Pls when the ones in circulation are tattered and torn,what are we going to use for transport fare or to buy #10 pure water?They should take we ordinary citizens into consideration nao.