Lately the Nigerian public was outraged over the new Central Bank of Nigeria (CBN) rates on cash deposits above five hundred thousand Naira. Describing the new banking policy as outdated, antiquated and retrogressive by some folks while some see it as a weclomed development. Some Nigerians have lashed out on the apex bank describing the policy as demonstration of systematic way of killing the new found cashless economy, which the Jonathan era financial managers tried to ensure that it works in Nigeria. As it stands now, it is a bit hazy and confusing out there for Nigerians but CBN has made their position clear and it is expected that financial institution must comply.
What is the crux? There was a circular, In a circular to all deposit money banks (DMBs), the Director, Payments System Management Department at the CBN, Sam Okojere, it said henceforth 3 percent processing fee would be paid for withdrawals and 2 per cent for deposits of amounts above N500,000 for individual accounts.
Apart from the populace, the top shots and elites are not finding the policy palatable and the house of representative directed that the policy be stopped with immediate effects. The big question is; would CBN governor budge or call them bluffs? As it stands now, his stand is that of the latter than former because, he isn’t answerable to them. The new twist is that people are confused while the politics is still in effects since there hasn’t been any announcement from the apex bank.
Nigerians have been divided on this, according to Patrick Thorpe “ I believe that this policy is in the right direction. It is preventive; it would encourage people to use more of the electronic means to make transactions instead of sitting on huge ash. How can people be having over 10 million in their homes and shops and these monies aren’t fully captured by the economy. They do cash most times. You don’t try this madness in developed countries where you use cash for bulk purchases; it is only in Nigeria that people carry bags of money around. This has to stop and this is the right policy.”
According to Fatungase Nosa Emmanuel, he went all ballistic, he said” This CBN governor is the worst, dumb governor. Must you enforce cashless policy, the economy transcend to cashless policies if the economy is good. You don’t force it by increase hardship on the masses. How do you expect uneducated market women to go cashless. No sensitization of the masses you and you are saying cashless.”
“In simple terms, FG is trying to dissuade people from cash deposits, money laundering and long queues in the banking hall. So if you go to make a deposit with above 500k, you will pay a surcharge of 15k.If you go to the bank and ask for a withdrawal above 500k, you will pay a surcharge of 10k.This includes and is not limited to other bank transfer charges. In summary, you can transfer above 500k via online banking for the normal 50naira charge. It’s even risky handling such cash withdrawal, and it’s a right step in enforcing cashless economy. If you have never filled a withdrawal form of above 500k in a bank, please this policy has nothing to do with you”, queried Sillyking Chyme.
Personal (Individual) Account minimum deposit is N500k. If you deposit above N500k, Bank will charge you 2% on the excess. Corporate (Business) is N3m minimum deposit. If you deposit above N3m, Banks will charge you 3% on the excess.
*For Withdrawals: Personal (Individual) Account, Minimum Withdrawal – N500k, while (3%) is on the excess withdrawal above N500kCorporate (Business) Account, Minimum Withdrawal is N3m. The 3% will apply when you go withdrawal above N3m.
Speaking on the directive, Adedeji Azeez opined that “Please those who have bank accounts must have by now been notified by their banks about this new CBN directive. They are not meant for small savers. They are targeting accounts with balances from 500k and above. Though I’m not in support of the new circular because banks I know would overstep their bound and spread it over every account small or big.”
“The charges is for deposit and withdrawal of N500, 000 and above, no problem at all when next you to withdraw or deposit just do N450,000 then go back later and deposit the remaining and nothing will happen. Thank me later”,Dayo Omodare added.
As Nigerians, high and low worry about the new deposit rates, it has been said that this policy would deepen and widen the “unbanked”. Nigerians that doesn’t have bank accounts are in the neighborhood of 60% – 70% making it one of the highest in the continent. The previous government has tried to make people visit the banking halls and made accounts opening procedures easier. Would this policy shore up the government revenue or scare people away from banks, making government to lose revenues from cash on transfer (COT) Value added tax (VAT) and others? Time would tell.
ANTHONY EMEKA NWOSU
In a circular to all deposit money banks (DMBs), the Director, Payments System Management Department at the CBN, Sam Okojere, it said henceforth 3 percent processing fee would be paid for withdrawals and 2 per cent for deposits of amounts above N500,000 for individual accounts.