First and foremost what is Cashless Policy?
Cashless Policy as the name Implies involves less money in circulation aimed at reducing money in circulation.
FEATURES OF CBN CASHLESS POLICY
Maximum daily withdrawal limit for Individuals is 500,000 naira,
Maximum daily withdrawal limit for corporate organizations is 3million naira.
PROCESSING FEE UNDER CASHLESS POLICY
INDIVIDUALS – Withdrawals above stipulated 500,000 attract 2% charge brought down from 10%.
CORPORATE BODIES – Lodgements above limits for corporate bodies has been reviewed downward from 20% to 3%.
CBN granted exemptions to ministries, Departments and Agencies, Federal and state local governments for accounts operated by them waved penalty on the cash limit for primary mortgage institution and microfinance banks.
CHALLENGES OF CASHLESS POLICY
– How does the rice seller in Daleko market in Isolo or car dealer at Berger receive his Payment for his or her goods.
According to CBN”s identified challenges of Cashless Policy they include;
1. Challenges on Electronic Transfer on Cashless Policy on low bandwith by Telecom Operators.
2. Nigerian Interbank Settlement System – NIBSS.
Its an instant transfer which involves electronic transfer but due to a lot of dependencies its not functioning properly.
3. Unbanked People in the country due to high bank charges which are not properly communicated to the customer during a/c opening process.
People have expressed doubts about the effectiveness of POS TERMINALS, according to Financial experts, the move is too idealistic in a country like Nigeria with higher percentage of the people residing in the informal sector. However, they believe that as much as the APEX BANK hopes to enhance the the country”s payment system. It needs to understand that the failure of the past regime to achieve this objective is not as a result of the in adequacy in their plan or policies but their inability to effectively locate the relationships in the system as one holistic entity.
CBN”s Planned introduction of the 5000naira note will negate s the principle of cashless policy, though the CBN as the country’s financial regulator needs to carry out it’s fiscal and monetary policies so as to ensure economic stability.
CRITICISMS AGAINST 5000 NAIRA NOTE
1. It will aid corruption especially in the political sector as you can hold a large amount of money very easily, so even “GHANA MUST GO BAGS” might not be needed to move large sums of money from one place to another.
2. Barely 7years ago after the introduction of coins which Nigerians didn’t embrace, the planned introduction of 5000 will ultimately make #20, #10 and #5 being coined and somehow loose its value and that would be termed to be a wasteful venture when such resources can be expended on job creation and poverty reduction.
3. Past Leaders and social critics led by former president Olusegun Obasonjo and Dina Melaye others have called for the stop in the plans to introduce the 5000 naira notes.
4. The palnned introduction of 5000naira notes wil lead to in flation as people would laterally want to collect currency of higher value to avoid taking lesser value i.e #5 and #10.
5. Developed countries of the world most notably UK, USA and China and the G8 economies introduced those currencies in-order to aid balance of payment and trade but in developing countries like Nigeria it would be prone to abuse through money laundering activities and Bribery and Corruption.
6. Security Implication – Nigeria as a Sovereign nation which has its own Printing and Minting Company in the NSPMC – Nigeria Printing and Minting Company which is allocated statutory budgetary allocation to handle such ventures is being shut out in the planned printing of the currency thereby Nigeria is using its own resources to develop other countries economy.
Writen By Odubiyi Folaranmi