The House of Representatives on Thursday directed Central Bank of Nigeria (CBN) to put on hold the implementation of the cashless policy on deposits and withdrawals above N500,000 by individuals and N3 million for corporate organisation.
The resolution followed the adoption of a motion sponsored by Hon. Benjamin Kalu, chairman, House Committee on Media and Public Affairs titled “Need to suspend the implementation of the cashless policy on deposits by the Central Bank of Nigeria, CBN”.
Consequently, the House mandated the Committee on Banking and Currency to interface with the CBN to ascertain the propriety, relevance and the actual need for the implementation of that aspect of the cashless policy at this time considering the prevailing economic situation of the country.
The Committee is except to report back to the House within four weeks for further legislative action.
While leading debate on the motion, Hon Kalu noted that the Central Bank of Nigeria (CBN) introduced a policy on cash-based transactions which imposed a cash handling charge on daily cash withdrawals that exceed #1500000 for individuals and $18,000,000 for corporate bodies in 2012.
He said he was “aware that the policy on cash-based transactions (withdrawals) in banks, was aimed at reducing and not eliminating the amount of physical cash (coins and notes) circulating in the economy, and encouraging more electronic-based transactions (payments for goods, services, transfers, etc)”
He noted that the cash policy was introduced for a number of key reasons including the need to drive development and modernization of our payment system in line with Nigeria’ 5 vision 2020 goal of being amongst the top 20 economies by the year 2020, to reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach, inter alia.
According to him, ” a variety of benefits are expected to be derived by various stakeholders from an increased utilization of e-payment systems which include: increased convenience, more service options, reduced risk of cash-related crimes, cheaper access to (out-of-branch) banking services, access to credit and financial inclusion for consumers; faster access to capital, reduced revenue leakage and reduced cash handling costs for corporations and increased tax collections, greater financial inclusion, increased economic development for government”
He said the Central Bank of Nigeria has signalled the implementation of a policy which would signal the imposition of charges on deposits in addition to already existing charges on withdrawals.
According to him, “Informed that the charges, which took effect from Wednesday 18“1 September 2019 will attract 3% processing fees for withdrawals and 2% per cent processing fees for lodgments of amounts above $600,000 for individual accounts; 5% processing fees for withdrawals and 3% per cent processing fee for lodgments of amounts above 443,000,000 for corporate accounts
“informed again that the charge on deposits would apply in Lagos, Ogun, Kano, Abia, Anambra and Rivers States as well as the Federal Capital Territory; and that the total
nationwide implementation of the cashless policy would take effect from March 31 2020″
The motion was unanimously supported by the lawmakers when put into voice by the Speaker, Hon Femi Gbajabiamila who presided over the plenary.