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CBN to peg daily cash withdrawal at N150,000

By on April 29, 2011

 

The Central Bank of Nigeria (CBN) has pegged daily cash withdrawal and lodgments by individuals at N150, 000 and N1 million by corporate organisations. The policy, which kicks off June 2012, is intended to curb the dominance of cash in the economy and its implication for cost of cash management to the banking industry, security and money laundering.

 

 

 

 

CBN Director, Currency Operations Department, Muhammad Nda, said the bank took the decision after a combined meeting with the Bankers’ Committee where it was agreed that the policy be adopted to reduce the high usage of cash, moderate the cost of cash management and encourage the use of electronic payment channels.

The CBN said that from the above date, organisations that make cash transactions above the limits will be charged a penal fee of N100 per thousand and N200 per thousand respectively for amounts above the cumulative limits.

Also, contravention of this policy will attract a fine of five times the amount that the bank waives as a first offender. Besides, further contraventions will cost the bank 10 times the charges waived.

Also, third party cheques above N150,000 will not be eligible for encashment over the counter as value for such cheques will be received through clearing.

“If a bank allows third party cheque encashment, it shall be liable to a sanction of 10 per cent of the face value of the cheque or N100,000, whichever is higher. Banks will cease cash in transit lodgment services rendered to merchant-customers from June 1, 2012. In this regard, customers could engage the services of the CBN licensed cash-in-transit (CIT) companies to aid cash movement to and from their banks at mutually agreed terms and conditions. Contravention of this policy shall attract a fine of N1 million per specie movement,” Nda said in a statement.

According to him, the policy will initially be enforced in Lagos State, Federal Capital Territory Port Harcourt, Kano and Aba in the first instance while it will be extended to other parts of the country at a date to be determined by the Bankers’ Committee.

Furthermore, to achieve interoperability of local currency Point of Sale transactions, no card scheme, foreign or local, will operate exclusive acquirer agreement or contract in the country with effect from June 1, 2011. “Any payments scheme, processor, switching company, service provider or bank that contravenes this policy may be suspended for a minimum of one month by the CBN as a processor, switching company. This also applies to private and public sector transactions, all financial institutions including Deposit Money Banks, Savings and Loans, Mortgage and Microfinance Banks,” he added.

The compliance with the policy according to the banking watchdog, will be monitored by the Banking Supervision Department and the Other Financial Institutions Supervision Department with appropriate sanction applied to erring institutions.

The CBN promised to make general announcements and carry out public awareness programmes and individual banks are expected to do same.

 

“The affected customers of banks should be informed in good time by the banks with clear advice on alternative electronic payment channels available to them,” said the CBN.

Source : The Nation