By Chinwendu Obienyi
With the dust around the Central Bank of Nigeria (CBN)’s review of cash withdrawal limit finally settling, financial experts yesterday, urged the apex bank to gradually implement its cashless policy to enable commercial banks upgrade their infrastructure to the point of handling higher volume of online transactions without consistent transaction flip flops and reversals.
The CBN had on Wednesday, reviewed its policy on cash withdrawal limits, increasing weekly withdrawals for individuals and corporate organisations to N500,000 and N5 million, respectively.
The apex bank in a circular, explained that the review became necessary following the feedback it received from stakeholders, noting that it is aware of the important role that cash plays in the Nigerian economy, especially in rural Nigeria where virtually all transactions are cash-based.
“The CBN recognises the vital role that cash plays in supporting underserved and rural communities and will ensure an inclusive approach as it implements the transition to a more cash-less society. All banks and OFIs are to note that aiding and abetting the circumvention of this policy will attract severe sanctions”, the circular read.
Reacting to the development, economic experts who spoke to Daily Sun via a telephone chat, noted that the review of the cash withdrawal limits will favour Point of Sales (PoS) operators, Small Medium Enterprises (SMEs) and the rural communities most of whom are sustained by cash transactions.
They however expressed concerns that the reviewed cash limit might push some Nigerians outside the banking system. The Chief Executive Officer, Center for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, expressed satisfaction with the revised limit, stating it would allow for better accommodation of SMEs, formal, informal and rural sector. Yusuf said this is positive news since the new circular stated that the policy applies to all channels.
“It is a great relief but there is also the danger of forcing some people to stay completely outside the banking system. Take for instance, the people in the rural areas who are into commodity trading of tomatoes, onions, cattle, yam, grains and for those of them there, they need far more than N500,000 to trade and if you are telling them that you can only do N500,000 in a week, these are people who do business to the tune of N5 million in a week because they buy and sell, such people will stay outside the banks and just be doing their business with cash. We cannot wish them away because they are part of this economy and this revised guideline is still not good enough for them and so they will stay away from the banking system”, he said.