Cash policy: Reps to meet with Bank CEOs, Wednesday

The House of Representatives on Tuesday concluded plans to meet with the Chief Executive Officers of Deposit Money Banks over the non-availability of redesigned new naira notes and the cash swap policy.

The resolution was passed sequel to the adoption of a motion on a ‘Matter of urgent public importance on the ‘Need for the Central Bank of Nigeria (CBN) to review the Cashless Policy and extend the timeframe of the currency swap’ sponsored by Hon. Sada Soli.

In prompt response to various concerns expressed by Nigerians and owners of businesses, the Speaker, Hon. Femi Gbajabiamila constituted an Ad-hoc Committee that will interface with the Banks’ Chief Executive Officers on Wednesday.

Hon. Gbajabiamila also harped on the need to meet with the CBN management after the meeting with the Banks’ accounting officers.

In the bid to address the challenges being faced by Nigerians and businesses, the House urged CBN to extend the implementation of the Cashless Policy to at least six months as well as review the daily withdrawal limit and the charges therefrom.

The lawmakers also harped on the need for the apex bank to expedite action on making the redesigned N200, N500 and N1,000 notes available to Nigerians.

To this end, the House called on President Muhammadu Buhari to intervene in the insistence of the CBN on the tight deadline for the implementation of the Cashless Policy and currency swap.

In his lead debate, Hon. Soli observed that pursuant to Section 2, paragraphs (a) and (d) of the CBN (Establishment) Act, 2007, the objects of the Central Bank of Nigeria shall be to ensure monetary and price stability, and promote a sound financial system in Nigeria, respectively; Also notes that banks are places where people keep their money for safety and expect to withdraw it when needed.

“The House recalls that in December 2022, the House of Representatives invited the CBN Governor to discuss the cashless policy and introduction of the redesigned 200, 500 and 1,000 notes.

“The House is aware that the cashless policy is in tandem with global best practices.

“The House is also aware that for such a policy to be successful, it should not be overbearing on the people and the economy.

“The House is concerned that the financial institutions in Nigeria lack the infrastructure to handle a sudden increase in customer base as well as adequate employees to handle any challenges that could arise in the process of implementing the cashless policy within the limited time given by the CBN.

“The House is also concerned that Banks and POS outlets are struggling with a shortage of the redesigned new Naira notes ahead of the CBN deadline of January 31, 2023, consequently making it difficult for them to comply with the CBN directives as regards availability of the new notes for customers.

“The House is further concerned that despite several concerns and appeals by the National Assembly, the Governors Forum, the Bank Customers Association of Nigeria, and a host of other stakeholders in the country for the CBN to extend the period for the currency swap of the new Naira notes as well as a review of the cashless policy, the CBN has remained adamant on the given deadline.

“The House is worried that due to inadequate sensitization and the rush in the implementation of the policy, the country is exposed to a situation whereby businesses or rejecting the old currency even in the face of unavailability of the redesigned new naira notes.

“The House is also worried that as a result of the rigidity in the implementation of the policy, there is a tendency of decline in the economy if cash withdrawals are delayed due to short supply of the new Naira notes.

“The House is cognizant that in order for the policy to be successful and acceptable, the CBN should keep their relationship closer to reality, rather than theorized assumptions.

“The House is also cognizant that in global best practices, currencies are phased out, not forced out, thus adequate time is required for such policy.

“The House is further cognizant that the policy, though a good one, is not fair on the incoming government which will require a smooth transition, which will help to promote and financial system in the country.

“The House is disturbed that coercing the people to accept the new CBN policy within such a timeframe will pose serious monetary challenges and impact negatively on micro-economic activities across the country,” he noted.

In his remarks, a member representing the Chibok federal constituency of Borno State, Hon. Ahmed Jaha noted that CBN officials deployed to one of the communities within his Constituency do not have sufficient cash.

“I just came back from my constituency yesterday, I want to use this opportunity to commend the CBN for taking certain steps to address this issue in my constituency.

“As I am talking to you, CBN staff are in my constituency since yesterday. They went there with some amount to swap the little currency with people. It is a very good move but I also realised that the amount taken there is not enough to swap the available currency in the hands of the people.

“For the past 10 years, my constituency is operating without a single bank branch in my constituency. People transact, do their activities and do other activities in cash. I have a ward in my constituency in Kirawa Ward on the border of Cameroon, only N1 million was taken to the ward to swap, when they have N100 million.

“When they were given the money, they gave them 100 notes, while people are doing transactions in 200, 100, and other lower denominations,” Hon. Haha noted.

While ruling, Hon. Gbajabiamila said: “We can all agree that it is a good policy. There is a need to review the policy. I think we need to add another prayer because on one hand,–this is the crux of the matter, the banks are saying they have the money, on the other hand, CBN is saying, no you have the money. In fact, we will penalise you if you give out an old note. Go and issue the new note we have given you. There is a difference. One is saying they don’t have it, the regulator is saying they have it.

“We need to amend and invite the bank MDs, the major ones to brief the leadership or very small ad hoc committee. Let us find out the truth about whether these new notes are available. Is it the banks or the CBN,” he said.

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