Home Consumer Tech Cashless Nigeria won’t wipe Naira as CBN answers 50+ questions

Cashless Nigeria won’t wipe Naira as CBN answers 50+ questions

Cashless Nigeria won’t wipe Naira as CBN answers 50+ questions
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[su_heading size=”18″ align=”left”]The Central Bank of Nigeria has commenced Cashless Nigeria as part of a national ambition to be one of the best 20 economies before the year 2020. CBN informed the world that Nigeria would commence the process of changing to a cashless economy by January 2012. “The main reason for the policy was to reduce the amount of Naira notes and coins (cash) used for business but not to eliminate cash usage”, says the nation’s apex bank which also addressed some 50+ questions you may have about Cashless Nigeria below:[/su_heading]
Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN)
Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN)
What is the CBN cash policy?
The CBN cash policy requires a daily total limit of N500, 000 and N3, 000,000 on free cash withdrawals across all accounts owned by individual and corporate customers respectively. Individuals and corporate organizations that make cash withdrawals above the limits will be charged a service fee for amounts above the cumulative limits;
cumulative limits
Furthermore, 3rd party cheques above N150, 000 shall not be eligible for payment over the counter with effect from March 30, 2012. Value for such cheques shall be received only through the clearing house.
Banks will discontinue cash in transit deposit services rendered to merchant-customers with effect from January 1, 2012.
  1. Why is CBN introducing the cash policy? What are the benefits of the new policy?
  • To increase convenience/access to payment (more payment options).
  • To enable more transparency in payment systems, and allow for more effective monetary policy.
  • To reduce risk of robbery.
  • To reduce huge cost associated with cash handling (printing, storing, processing, distributing, etc).
  • To enable the achievement of the nation’s vision 2020 objective.
  1. Does the cash policy mean there will not be cash in circulation or people are not allowed to use cash?   
No. There will still be cash in circulation. The cash policy aims at reducing the use of cash while increasing the use of alternative            forms of payment.
  1. When is the cash policy taking effect? The cash policy started on January 1, 2012 in Lagos as pilot.
Phase 2 went live in Abia, Anambra, Rivers, Ogun, Kano and the FCT on July 1, 2013. Nationwide implementation of the policy will commence in 2015.
  1. Does the cash policy mean bank customers won’t have access to their money? Are there any restrictions on the amount of cash customers can pay in or withdraw? As an account holder can I withdraw more than N150,000 over the counter?
No! The cash policy allows you to withdraw/deposit any amount of money from/to your account. However, if a withdrawal of cash is done above the daily free total limit of N500, 000 and N3 million across all accounts owned by individuals and corporate organizations respectively, you will be charged a service fee only on amounts above the cumulative limits.
cumulative limits 2
The policy does not restrict the amount of cash that an individual can withdraw. It only says that they will have to pay service fees on the excess cash.
  1. When did the charges begin?
The charges on cash withdrawal above the set limit began on March 30, 2012 in Lagos, October 1, 2013 in Abia, Anambra, Ogun, Rivers, Kano and the F.C.T.
  1. How much will I be charged when I withdraw cash above the limit?
You will be charged 3% of the amount withdrawn as an individual or 5% as a corporate organization over the limit.
  1. Will the charges be applied per transaction, daily or monthly?
Charges will be applied daily, since it requires the total daily amounts above the limit.
  1. If I withdraw N550,000 which is above the limit how will I be charged?
You will be charged the processing fee on N50,000.00 only.
  1. Who owns the processing fee? CBN or banks?
The Processing fee goes to the CBN and Banks.

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  1. Can third party cheques still be cashed over the counter?
Third party cheques greater than N150,000 can no longer be cashed over the counter.
  1. Can I issue multiple cheques of 150,000 each on the same day and not breach the policy.
No. The limit is on daily cumulative cash withdrawal AND NOT per withdrawal. So, if the cheques are going to be lodged into an account, it is allowed; but if the cheques are for over the counter withdrawals you would have breached the policy.
  1. Will a signatory to a corporate account be allowed to withdraw over N3,000,000 on the corporate account since he is one person?
If a representative and signatory to a corporate account presents a cheque on behalf of his company, it is considered a corporate withdrawal and he can cash up to N3,000,000 cumulatively on that account.
  1. Can I withdraw more than once but not exceeding N 500,000 each?
Yes, you can withdraw more than once and NOT breach the policy provided your total withdrawals per day do not exceed N500,000.
  1. Are we going to be reported for depositing or withdrawing more than N500,000?
There will be no reports on individuals or corporates that exceed the limits. It is not illegal to exceed the limits; you will only be charged a processing fee on amount deposited/withdrawn exceeding the limit.
  1. What are the alternatives to cash payments?
Any of the under listed channels can be used for electronic transactions instead of cash; Point-of-sale (POS) terminals Mobile payment system Internet banking Multi-functional ATM Electronic Funds Transfer Systems Direct debit for regular in nature bills payment
  1. How do I begin to use any of the alternative payment channels?
You can go to your bank and make enquiry on any of the channels, you will be guided accordingly. The CBN has also licensed mobile payment operators to roll out mobile payments.
  1. Must I use all the alternative payment channels?
You can use any one that suits your need. You can equally use more than one or all depending on your needs, but you are not forced to use all.
  1. How do I get a POS as a merchant and what does it cost me to have it? Is there any charge on the amount spent by a customer in my shop?
Your bank will give you a POS terminal on request (most likely free of charge depending on your transaction volumes).
You will only be paying 1.25% of the transaction (amount spent by customer) subject to a maximum of N2000 per transaction.
Q 19
  1. What is the cost of POS?
The industry has endorsed four manufacturers for the supply of Point-of-Sale terminals – PAX, Bitel, Ingenico, and Verifone – with negotiated discounts and local support arrangements. A POS can be purchased from any of these four for as low as N45,000.00 per terminal. However, parties are free to purchase POS terminals from any manufacturer; so far they meet the POS specifications in the Point-of-Sale guidelines.

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