CBN to extend cashless policy to two more states

The Central Bank of Nigeria (CBN) has concluded plans to extend its cashless policy to Rivers and Ogun states from July 1, this year. The decision to extend the cashless project to these states was made at the last Bankers’ Committee Meeting, held in Abuja.
The CBN had earlier announced that the policy will take off from July 1 in four additional states, after the Lagos pilot scheme. The states are Kano, Anambra  and  Abia, as well as the Federal Capital Territory. CBN’s Head, Shared Services, Chidi Umeano, said the aforementioned states and the FCT were chosen, due to the large volume of cash transactions in some of their major cities such as Aba, Kano, Port Harcourt and Onitsha, among others.

The cashless policy, whose implementation began in Lagos in January, last year, is aimed at reducing the dominance of cash in the system. The policy specifies penal charges for individuals and corporate organizations that want to withdraw or lodge cash above prescribed limits. Under the policy, the CBN pegged the daily cumulative cash withdrawal or deposit limit for individual accounts at N500, 000 per day and N3 million per day for corporate accounts. Umeano explained that the policy earlier planned to be implemented in other states in January 2013 was deferred due to some infrastructural challenges.

He said the CBN is also being careful to ensure that it makes use of resources in a smart way. Commenting on the same issue, CBN Deputy Governor, Operations, Mr. Tunde Lemo, explains: “When we talk about nationwide roll-out, we are also being careful to ensure that we make use of resources in a smart way. Cash doesn’t flow in the same volume in every state of the federation. What we would do in July is to look at those other market clusters where large volumes are transacted and add them to Lagos.” He added: “It is cheaper that way because resources needed to cover the entire 923 square kilometres in Nigeria are huge.

But you can achieve almost the same thing by looking at the pattern of cash distribution and you can cover about 90 per cent of that by adding about more locations to Lagos. “That is basically what we want to do. We would get those clusters and add them to Lagos. When we add those locations to Lagos, then we would have covered about 90 per cent of the cash volume. We would see how far that goes and once we perfect that, we then begin to look at contiguous.” Banks have continued to roll out more innovative electronic payment platforms to meet customers’ expectations. The cashless policy has been very successful in Lagos considering when it started and how far it has gone in terms of PoS deployment. At the initial stage of Cash-less Lagos, there were less than 10,000 PoS in Lagos, but currently there are over 150,000 PoS machines in the state alone.