Cashless Policy: Reps demand halt of CBN’s new charges on bank transactions

House of Representatives plenary on Tuesday, 17th September, 2019. Photo credit: Speaker’s Media Office
House of Representatives plenary on Tuesday, 17th September, 2019. Photo credit: Speaker’s Media Office

The House of Representatives has asked the Central Bank of Nigeria (CBN) to immediately suspend the implementation of the new aspect of the cashless policy on deposits which has taken effect today.

The lawmakers took the resolution after adopting a motion brought under matters of urgent national importance by its spokesperson, Benjamin Kalu.

The CBN had announced that from Wednesday, September 18, certain cash deposits and withdrawals from individual bank accounts are to attract additional charges.

In a circular to all deposit money bank (DMBs), the Director, Payments System Management Department at the CBN, Sam Okojere, it said henceforth 3 per cent processing fees would be paid for withdrawals and 2 per cent for deposits of amounts above N500,000 for individual accounts.

The apex bank also said corporate accounts will attract 5 per cent processing fees for withdrawals and 3 per cent processing fee for lodgments of amounts above N3 million.

The CBN said the charges would be in addition to already existing ones on withdrawals and is aimed at encouraging its cashless policy.

The new directive has already started generating heated arguments in the polity.

‘Negative impacts’

But reacting to the new policy, the lawmaker said the implementation of cashless policy in Nigeria so far, has led to a significant decrease in deposit mobilisation and credit extension by Nigerian Money Deposit Banks.

“The implementation of cashless policy on withdrawals has negative impacts on micro, mini, small, and medium enterprises which are clearly the engine room for growth of the economy and employment generation, thereby throwing many of them out of business and sending more Nigerians into poverty, forcing more traders and micro investors to carry cash about with its attendant security challenges,” Mr Kalu said.

“While the impact of the cashless policy on withdrawals is still starring us all in our faces as well as other numerous burdensome charges by Nigerian Money Deposit Banks heavily impacting on businesses, the Central Bank of Nigeria deemed it necessary to impose the implementation of cashless policy on deposits, without due consultations with all shades of stakeholder who will be impacted by the policy.

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“This overbearing burden aimed at closing down majority of micro, mini, small and medium businesses in Nigeria is also aimed at enriching Nigerian Money Deposit Banks owned by a privileged few, without any known financial contribution to the consolidated revenue fund of the federation,” he added.

The lawmaker said he was concerned that the Central Bank of Nigeria “did not consider the people as the as prime, important and in deed the centre piece of policy-making, even as Section 14(2)(b) of the Constitution of the Federal Republic of Nigeria, 1999 (As Altered) provides for the security and welfare of the people as the primary purpose of government”.

The House called for the immediate suspension of the policy.

The House also mandated its Committee on Banking and Currency to interface with the CBN “to ascertain the propriety, relevance and the actual need for the implementation of that aspect of the cashless policy at this time considering the prevailing economic situation of the country and to report back to the House within 4 weeks”.

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