With less than 14 days to the commencement of charges on cash deposits and withdrawals above N150,000 and N1m for individuals and corporate bodies respectively in Lagos State, the Central Bank of Nigeria has said it will reduce the service charge and increase the transaction limit for individuals.
The Deputy Governor, Operations, CBN, Mr. Tunde Lemo, disclosed this to our correspondent on the sidelines of the Advocacy Forum on the Cash-less Economic Policy, organised by the Institute of Directors, Nigeria in Lagos on Thursday.
By the policy, which kicked off in Lagos on a pilot basis on January 1, 2012, customers will start paying 10 per cent unit charge on transactions above N150,000 and N1m for individuals and corporate bodies respectively from March 30, 2012.
Lemo said, "We are going ahead with the March 30 deadline for deposit and withdrawal limits as earlier planned. However, the associated costs will be reduced, while the transaction limit for individuals will be increased to around N500,000."
"We have not said people will not be able to withdraw above these limits, what we have said is that there will be an associated cost that goes with these transactions. We have never used the word penalty."
He pointed out in his presentation at the forum that the target of deploying 40,000 Point of Sale machines in Lagos had been exceeded, adding that the banks were still deploying.
"We have an agreement with Glo and MTN to ensure 99 per cent uptime since both channels will serve as backup to each other. Also, negotiations by the CBN with manufacturers of PoS terminals have ensured that banks got the best rates and support services for their PoS machines. The charge for using the PoS, which is 1.25 per cent, is not to be borne by the customers," he said.
Lemo noted that the Bankers Committee, in conjunction with the CBN, commissioned a study, which identified cost drivers in the industry and the possibility of achieving 30 per cent cost reduction with the attendant positive impact on lending rates and bank charges.
He said, "In the wake of the banking industry intervention, our analysis indicated that the high-cost structure of the banks was partially responsible for their preference for lending to the capital market and oil and gas industry, which led to asset bubbles."
The policy will enable greater financial inclusion and integration of financial services into the economy with its attendant positive impact on economic development.
The Chief Executive Officer, Economic Associates, Mr. Ayo Teriba, said the apex bank should enlighten Nigerians more on the benefits of the cash-less programme rather than laying more emphasis on deadlines.
Teriba said, "The policy is a good one, no doubt, but the CBN should spend more time telling the people the benefits of the project. For instance, the CBN should tell me what I stand to gain if I use other payment channels."
"We hear too much of deadlines, If I know what I stand to gain by using other channels, then I don't need to be threatened before I reduce my cash transactions."
The Chairman of Council, IoD, Mr. Thomas Awagu, said, the payment system plays a very crucial role in the development of any nation. In the advanced economies of the world, the use of physical cash as a medium of exchange for goods and services has been gradually replaced with various online services such as e-payment, mobile payment, debit card and credit card.