In line with the Central Bank of Nigeria (CBN)’s recent review of the cashless policy, which resulted in the reintroduction of charges on some categories of cash deposits and withdrawals, banks across six states- Lagos, Ogun , Kano, Abia, Anambra, Rivers- as well as the Federal Capital Territory (FCT), are getting ready to begin implementing the policy.
Findings by New Telegraph revealed that in recent weeks these banks have increased the number of emails and text messages that they have been sending to their customers to inform them that the reintroduced charges would soon come into effect.
It was also gathered that the lenders have trained their staff on how they can patiently explain the development to customers.
The head, Lagos branch of a Tier 2 bank, who spoke on condition of anonymity, said: “We know things are difficult for most people because of the tough economy, so most of the customers are likely to lose their temper when we inform them about the reintroduced charges. The option we have is to keep our cool and not allow ourselves to be provoked.”
According to the CBN, as from April 1, bank customers in the six states will have to pay charges if they are depositing and withdrawing cash amounting to N500,000 and above.
Specifically, for cash deposits between N500,000 and N1 million, the customer would pay a 1.5 per cent charge while the charge for withdrawal is two per cent of the amount.
Similarly, for cash between N1 million and N5 million, while deposit attracts two per cent of the amount, bank customers making withdrawals within the range would have to pay three per cent charge. For cash above N5 million, deposit attracts three per cent charge while withdrawals is 7.5 per cent. On the other hand, for corporates with cash less than N3 million, for deposit and withdrawals, there would be no charge.
But firms with cash between N3 million and N10 million, depositing such would attract two per cent charge, while withdrawals would attract five cent of the amount when the policy takes off.
Also, for cash between N10 million and N40 million withdrawn from a corporate account holder, three per cent would be charged for deposit and 7.5 per cent for withdrawals. For cash above N40 million, deposit is five per cent and withdrawals is 10 per cent.
Interestingly, when it was originally launched in 2011, the Cashless policy had stipulated that banks should impose charges on cash deposits of N500,000 and above. However, this was stopped shortly after the current CBN, Governor, Mr. Godwin Emefiele assumed office in June 2014.
He had explained then that the apex bank took the decision to scrap the charges because it believed that a zero charge on deposits would encourage investment attitudes among the savers. He further pointed out that during the course of the cashless policy pilot scheme in Lagos State, a lot of complaints were made by customers, particularly regarding the charges being imposed for cash deposits.
This, according to him, resulted in customers devising various means to avoid the charges such as opening of multiple accounts and other disingenuous behaviour with the aim of undermining the objectives of the policy.
However, last February, the CBN, in a circular to lenders, announced the reintroduction of the charges as well as a general review of all deposit and withdrawal charges under the cashless policy.
According to the circular, which was signed by the Director, Banking and Payment System, CBN, Mr. ‘Dipo Fatokun, the Bankers’ Committee, at its 493rd meeting held on February 8, 2017, reviewed the cashless policy charges on withdrawal and deposit and decided that the policy should be extended to the 30 remaining states of the federation.
While it would come into effect from April 1, 2017, in the existing cash-less states (Lagos, Ogun, Kano, Abia, Anambra, Rivers and the FCT), the policy will be implemented with the charges taking effect on May 1, 2017, in Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau States according to the CBN.
The policy would be executed with the charges taking effect on August 1, 2017, in Edo, Katsina, Jigawa, Niger, Oyo, Adamawa, Akwa Ibom, Ebonyi, Taraba and Nasarawa State.
The CBN further stated that the income generated from the processing fees charged above the allowable cash transaction limits shall be shared between it and the banks in the ratio of 40:60.
It, however, explained : “Existing exemptions remain sustained for revenue generating accounts of the federal, state and local governments (lodgments only). Embassies, diplomatic missions, multilateral and aid donors in Nigeria are also exempted from all processing fees relating to the cashless policy implementation.”
It would be recalled that following the CBN’s announcement of the reintroduction of the charges last February, this newspaper had reported that some bank customers in Lagos were opposed to the move.
A spare parts dealer, Mr. Tochukwu Orji, said he found it difficult to comprehend why a bank should want to penalise him for making cash deposits above N500,000 especially in this difficult time when so many businesses are closing shop. He expressed fears that the development could lead to more customers dumping banks for Ponzi schemes.
He said: “I was told the reintroduction of the charges is part of the CBN’s efforts to promote its cashless policy; that they want to encourage people to stop carrying large amounts of money about and instead to use electronic payment channels such as Point of Sales (PoS), Automated Teller Machines (ATMs) and so on, to transfer funds. But they are not going about it the right way.”
He argued that many businessmen and women still prefer carrying cash because they have had unpleasant experiences where they could not immediately seal a deal because available electronic payment channels were having network issues.