CBN to introduce policy on currency substitution ahead cash-less economy
Category: CASHLESS NIGERIA
November 24, 2011
*Targets limit on forex withdrawal
Ahead of the January 2012 pilot kick-off date for cash-less economy in Nigeria, the Central Bank of Nigeria (CBN) is about to introduce a policy targeted at currency substitution, Business Day has learnt.
Eyitope St. Mathew- Daniel, head, shared services, CBN, disclosed this in Lagos on Wednesday, at a breakfast meeting of the Committee of Chief Inspectors of Banks (CCIB).
According to her, with the policy underway, the CBN will put a limit to the amount of forex withdrawals which individuals and corporates can make, when the economy finally goes cash-less, in order to check currency substitution.
Justifying the rationale for going cash-less in the economy, she noted that in 2009, the CBN, in conjunction with the Bankers Committee, decided to embark on a shared services programme with three key objectives which include drastic cost reduction of 30 percent.
“Cost of cash in Nigeria’s financial system is high and increasing. Only 10 percent of branch cash transactions are above N150, 000, but they make up about 71 percent of transaction value. We are not going into zero cash (cashless) but light cash (cash-less).” Mathew-Daniel said.
She further told participants at the forum that the CBN’s cashless drive is an ambitious one that can be achieved, adding that “CBN governor, Sanusi Lamido Sanusi, is very responsible and will not make reckless decisions that will affect the implementation of this policy.”
Also speaking at the forum, Uju Ogubunka, Registrar/Chief Executive, Chartered Institute of Bankers of Nigeria (CIBN) reminded the apex bank that interactions with banks and bank customers have shown that there is a lot the CBN needs to do.
“First is the service charge for transactions. Second is that people must not be penalised for transactions done from one Point-of-Sale (POS) terminal to another. Third, is the need to know the people behind the card arbitration framework –there should be an exposure draft for people to make inputs. Fourth is the need to address the issue of demerits that could cause trouble when the economy finally goes cashless. There are issues that need to be addressed, and we need to use the pilot kick-off stage (here in Lagos) to address those issues.” Ogubunka said.