Senate urges CBN to increase cash withdrawal limit
The Senate has asked the Central Bank of Nigeria (CBN) to increase the amount of money an individual could withdraw across the counter in its new Retail Cash Collection Policy. The CBN had issued a circular ordering commercial banks and allied service providers not to allow cash withdrawal and lodgments by individuals exceeding N150,000 by June 1, 2012.
The circular also said that cash withdrawal and lodgments by corporate entities should not exceed N1 million. The apex bank warned that penalty for any violation would attract a fine of N100 on every N1000 for individuals and N200 for corporate entities. According to the new policy, if a bank pays any third party cheque above N150, 000 across the counter, it shall be liable to a fine of 10 per cent of the value of the cheque or N100,000.
The Chairman, Senate Committee on Banking, Sen. Nkechi Nwogu, at an interactive session, urged the CBN to reconsider the policy to favour more citizens. “The 10 per cent is too high, the N150,000 threshold is too low. As for the time frame, we will leave it with you.
If by June there are no ATMs in my village, this Senate committee will invite you back and this time around, we will call Nigerians to be in attendance. We are happy that you want to promote a safer and wired economy but we must also look out for the interest of the people we represent,” Nwogu said. Senator Nwogu also asked the CBN Governor, Mallam Sanusi Lamido Sanusi, to provide the committee with a quarterly update on the new policy. Members of the committee lauded the initiative of the CBN but asked that the individual limit should be increased to N250,000 while the June 2012 deadline be extended to allow for effective public enlightenment.
The CBN governor explained that the withdrawal limit policy was one of five total packages that were aimed at improving the banking system, moving the system away from cash to other channels.
Sanusi said the bank had anticipated complaints about the new policy but appealed that for Nigeria to become a cash-free economy, Nigerians must have ambition and belief. He explained that the bank had explored the financial systems of some countries including Ghana, Kenya, Brazil and Italy and realised that Nigeria was lagging behind. According to Sanusi, only 10 per cent of Nigerians are capable of withdrawing up to N100,000 per day, leaving the remaining 90 per cent to bear the high cost of cash management.
“The industry proposal is not to place a limit on cash transactions,’’ he said. The governor explained that it was to provide that the 10 per cent of customers who made high volume cash transactions bore the associated cost and eliminate the subsidy by the banking public. “We did not say you cannot do more than N150,000. If you do, you pay a fine so that you are not subsidized by the poor Nigerians,” Sanusi said.
He said the CBN was planning a pilot phase in Lagos and hinted that it might relocate to Rivers should the Lagos State Government refuse. The Senate committee also asked the CBN governor to appear before it at a later date to give details on the bank-s non-interest financial banking policy.
