The new cashless policy introduced by the Central Bank of Nigeria (CBN), which requires commercial banks to charge customers on over-the-counter cash deposits and withdrawals, has been causing discomfort for businessmen, our investigation in Kano and Abuja revealed.
The policy took off in Lagos in January 2012 and five other states joined in July this year. The states include Rivers, Kano, Anambra, Ogun and Abia and the Federal Capital Territory, Abuja.
The new policy directs banks to charge 2 percent on cash lodgments exceeding N500,000 for an individual and 3 percent for lodgments above N3 million for corporate organisations.
The policy also orders the banks to charge an individual 3 percent on any over-the-counter withdrawal above N500,000 while companies are to be charged 5 percent on cash transactions exceeding N3 million at a time.
Entrepreneurs in Kano and Abuja where the policy began two weeks ago claimed that they lose their profits to the charges by banks for doing nothing.
Since the cash processing fees were introduced as part of efforts to enforce the cashless policy in July this year, attempts by the banks to implement the charges were met with stiff resistance by customers who threatened to stop taking their money to the banks. The outrage that trailed the policy forced the CBN to suspend the charges to 2nd October.
However, it has been observed that the return of the charges has again instigated another round of protests by banks’ customers who complained that the charges would severely harm their businesses and reduce or even eliminate their profits.
Many businessmen who shared their views with our reporters said the policy was not well conceived because it could roll back the confidence of people in the banking sector.
In one of the commercial banks, our reporter heard a man complaining to cashiers on the counter because he had been charged the sum of N36,000 on a cash lodgment.
“I have never seen anything like this. This is very unfair. You (the bank) have always been encouraging us, even begging us to patronize you,” he said. “But now that you have gotten so many customers, you are creating problems in order to send us away. This is unacceptable. Our profits are not sufficient enough to accommodate these charges.”
It was gathered that businessmen operating bureaux de change, textile dealers at the Kano Kwari market, foodstuff and other commodities dealers at the Singer market and other major business centres have been having a hard time trying to cope with the policy due to their high volume of cash transactions.
A rice dealer, Adamu Abdullahi (not real names) said in order to evade the charges, he is forced to take extra cash home because his daily sales in cash usually exceeded the limit specified by the banks. “Most of our customers deal with cash because they always complain of long queues at the banks. We have no choice but to accept cash when they come with it and take it to the banks ourselves. But with the current charges on lodgments, nobody wants to make large deposits on any particular day because the charges are guzzling our profits,” he said, adding that many people have reverted to the old but very risky method of taking cash home. “The CBN should reconsider this policy for our security and safety. We cannot continue to keep money at home”, he added.
In Abuja, the policy was received with mixed reaction as some said it was a welcome idea while others see it as delay in business transactions.
Daily Trust spoke with some Small and Medium Enterprises (SMEs) owners in Abuja on the policy which CBN said has come to stay.
Nasir Muhammed, a wholesale distributor of African clothing in Utako market, he said the policy is a welcome idea but the problem is that most people lacked awareness especially those that are not educated.
“Many believe that they just take their money and buy what they want and not to be constrained by banking transaction which they believe is slow and time wasting,” Nasir said.
He said he has not fully started and therefore does not even know the charge rate, adding that as wholesale distributors they are used to collecting their money in cash and not through banking transactions.
He added that more awareness on the advantages of the policy should be created, “the government should enlighten the people so that they can know the benefits that accrue to it and people will be ready to receive it. The problem is that many people do not even know what they stand to gain from it.”
Popoola Olajumoke of Osareme frozen food in Kado fish market said that the policy is not a welcome idea for her type of business due to the high charges attached to it.
“At times when we have high sales it is not convenient for us to share the money to different banks and the charges for the transfer are too much. It is about N1,500. Another thing is the three percent of the money they charge for transaction of N500,000 is not a good thing for us,” she said.
Babson Bartholomew of Babson bookstore said the market is a bit slow because people are trying to adapt to the system, “I like it because it eases business transactions. I have not really noticed the charges because I try to maintain the minimum withdrawal. It is not going to be difficult accepting the policy in the city because almost everybody is used to banking transactions but for the rural areas it will take a long time.”
He said the issue of network problem in banks that delay transactions should be rectified so that people will not have reason to complain.
The pilot scheme of mobile money, is one of the financial services introduced by the CBN to achieve a cashless economy which was designed to provide mobile payment services, break down the traditional barriers hindering financial inclusion of millions of Nigerians and bring low-cost, secure and convenient financial services to urban, semi-urban and rural areas across the country.
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