Friday, 29 April 2011 00:00 Hope Moses-Ashike
•N150,00 for individuals •N1m for corporates
•Gives June 1, 2012 as deadline
The Central Bank of Nigeria (CBN) has pegged a limit of daily cash withdrawal and lodgment by any individual and corporate customer to N150,000 and N1 million respectively, effective from June 1, 2012 with commercial banks. This latest development, according to the apex financial regulatory authority is coming on the heels of increasing dominance of cash in the economy with its implication for cost of cash management to the banking industry, security, money laundering, among others.
Following the latest CBN directive, analysts who spoke with BusinessDay last night say the new rules may not work as customers could resort to having many bank accounts with several banks and making withdrawals from these accounts.
The CBN which says it is working in collaboration with the Bankers’ Committee says, it is adopting the policies to reduce the high usage of cash, moderate the cost of cash management and encourage the use of electronic payment channels.
In a circular signed by Muhammad Nda, director, Currency Operations Department, “CBN, individuals and corporate organisations that make cash transactions above the limits will be charged a penal fee of N100/thousand and N200/thousand respectively for amounts above the cumulative limits.”
The apex bank also says contravention of this policy shall attract a fine of five times the amount that the bank waives as a first offender. Subsequently, the bank shall pay 10 times the charges waived.
According to the CBN, “Third party cheques above N150,000 shall not be eligible for encashment over the counter. Value for such cheques shall be received through the clearing house.”
It adds that, “If a bank allows third party cheque encashment, it shall be liable to a sanction of 10 percent of the face value of the cheque or N100,000 whichever is higher.”
Furthermore, the circular states that, “Banks will cease cash in transit lodgment services rendered to merchant-customers from June 1, 2012. In this regard, customers could engage the services of the CBN licensed cash-in-transit (CIT) companies to aid cash movement to and from their banks at mutually agreed terms and conditions.
“Contravention of this policy shall attract a fine of N1.0 million per specie movement.
This arrangement shall be in force in Lagos State, F.C.T., Port Harcourt, Kano and Aba in the first instance. The arrangement shall be extended to other parts of the country at a date to be determined by the Bankers’ Committee.”
Continuing, it notes that to “achieve inter-operability of local currency POS transactions, no card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria with effect from June 1, 2011. Any payments scheme, processor, switching company, service provider or bank that contravenes this policy may be suspended for a minimum of one (1) month by the CBN as a processor, switching company… The license may be withdrawn by the CBN if the contravention is repeated.”
This policy, it stresses, “shall apply to both private and public sector transactions. All financial institutions, including Deposit Money Banks, Savings and Loans, Mortgage and Microfinance Banks shall comply accordingly. Compliance with the policy shall be monitored by the Banking Supervision Department and the Other Financial Institutions Supervision Department with appropriate sanction applied to erring institutions.”
While the CBN assures that it will make general announcements and carry out public awareness programmes, individual banks, it says, are expected to do same. “The affected customers of banks should be informed in good time by the banks with clear advice on alternative electronic payment channels available to them.”