By Babajide Komolafe

The Central Bank of Nigeria (CBN) will extend the cashless policy to Rivers and Ogun States from July 1st 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 States as well as the Federal Capital Territory (FCT) .

CBN’s Head, Shared Services, Chidi Umeano said  the aforementioned states and the FCT were chosen because of 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.

This was corroborated by the CBN Deputy Governor Operations, Mr. Tunde Lemo. who explained: “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”.

The Deputy Governor 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.