In the noble quest of CBN to keep the fire of reforms raging in the entire banking industry burning; at the same time sanitize the payments system, Central Bank of Nigeria (CBN), introduced a policy known as cashless policy, which is aimed at achieving a cashless economy. The policy was conceptualized by the apex bank to migrate Nigeria's economy from a cash-based economy to a cashless one through electronic payment systems (e-payment), not only to enable Nigeria's monetary system fall in line with international best practices or discourage movements of huge cash manually, but at the same time increase the proficiency of Nigeria's payment systems which will in turn improve the quality of service being offered to the banking public.
Under the policy which kick-started in Lagos as the pilot state, the apex bank pegged withdrawal by individual and corporate accounts at N500, 000 and N3millon, respectively. Processing (charges) fee for withdrawals above the limits for individual customers is three percent, while that of corporate bodies is five percent. Charges for lodgments for individual and corporate accounts are two percent and three percent, respectively. However, ministries, Departments and Agencies, MDAs, specialized banks, diplomatic missions, embassies, multilateral and aid donor agencies have been exempted from penalties and charges emanating from this policy. The successful implementation of this policy and its positive impacts on the banking public in Lagos dismissed the earlier submissions of the critics of the cashless policy who argued extensively that the policy would not see the light of the day because of the myriads of challenges predicted by the same die-hard critics of this policy.
The smooth take-off of this policy in Lagos finally lay to rest the initial fears entertained by the bank customers as regards this policy. The successes recorded in the pilot state (Lagos) necessitated the extension of its implementation to other six states of the federation including FCT, Abuja. The five other states are: Rivers; Kano, Abia, Ogun and Anambra. Central Bank of Nigeria chose to commence the implementation of this policy in the above mentioned states after Lagos because of the huge cash transactions being experienced in these states. In fact, it is on record that these seven states including Lagos account for the ninety percent of cash transactions in the country. These indisputable facts informed the decision of the apex bank to begin the implementation of this landmark policy from the states of high concentration of cash transactions to the states of low cash transactions.
Cashless policy became effective in Abuja and other five states of the federation on 2nd October, 2013 after the expiration of the grace period given to the banking public in these affected states elapsed. The charges/penalties accruing from the policy was billed to commence on 1st July, 2013 but was shelved till 1st October, 2013 to enable more Nigerians get acquainted with the pros and cons of the policy; at the same time provide opportunity for relevant stakeholders in the banking sector to setup necessary infrastructure that would enhance a hitch-free implementation of the policy.
Based on the successes recorded in the seven states where Cashless policy has been running its full course, Central Bank of Nigeria has decided to extend it to all the States of the federation come 1st June, 2014. The implementation of this policy in all the states of the country including FCT, would not only reduce the pressure on Naira notes but will transform the nation's payment systems. In its proactive measures to effectively forestall the challenges some Nigerians may encounter especially those who are still ignorant of the policy, Central Bank of Nigeria has embarked on massive enlightenment campaign via the mass media outreach to educate both the banking and unbanked public on the nitty-gritty of this cashless policy through the production and airing of jingles in the three major languages being spoken in Nigeria such as: Hausa; Igbo and Yoruba to enable the message of actualizing a cashless Nigeria get to the rural dwellers and the downtrodden. In the area of basic infrastructure, Central Bank has also increased the number of Point-of-Sale (PoS) terminals across the country to ensure smooth operation of this policy.
Cashless policy will positively affect the economy through the following: reduction in inflation; help to curtail the illicit act of money laundering, minimise the spate of arm-robbery, reduce the cost of printing new naira notes, reduction in overhead cost of commercial banks, assist Nigerians to save money, etc. When there is a massive reduction in the movements of huge cash, it will invariably help the apex bank checkmate the surge of inflation, because whenever there is a reduction in bulk cash transactions; definitely inflation rate is going to subside. Cashless policy will also help financial crime commissions like EFCC and ICPC to fight financial crimes by making money laundering to be expensive because of charges that apply when making lodgements or withdrawals above the stipulated limits of N500,000 and N3 million for individual and corporate accounts, respectively. Therefore, those who are in the ugly habit of carrying huge money around will now have to pay for their excesses especially Nigerian politicians who convert their cars into bullion vans and bedrooms to strong rooms mainly during the electioneering campaigns especially now 2015 general election is at the corner. Central Bank of Nigeria will experience a sharp fall in the billions of naira being spent annually in reprinting naira notes, because whenever there is a drastic reduction in huge cash transactions, the lifespan of naira notes is usually prolonged. This policy will also help the security agencies to curb the menace of insecurity in the country by reducing the spate of arm-robbery, because thieves cannot invade people's apartments when they are aware that people are no longer keeping money at home. This policy will not only help in making Nigerian economy cashless, but as the proverbial silver bullet it represents would assist in solving other socio-economic problems plaguing Nigerian nation.
- Chidiebere, a public affairs analyst wrote in from Abuja.