The Central Bank of Nigeria (CBN) had recently issued a directive on cash transactions in Nigeria with stipulations that individuals and companies can only withdraw or lodge a total maximum of N150, 000 and N1m respectively per day with effect from June 1, 2012. In an exclusive interview with National Mirror at the weekend, Owuama given the nature of the Nigerian economy, a cash limit of N150,000 might lead to contraction in the economy as the large informal sector struggles to cope with challenges of electronic and paper transactions. According to him, although the move to reduce cash transactions would help to minimise the cost of cash management and cash-based frauds, it may lead to the emergence of a black market economy and widen further the gap between the formal and informal sector.
He said the CBN should look at the possibility of a higher threshold while also constantly monitoring the implementation of the cash limits to address any emerging adverse effects. CBN had stated that individuals and corporate organizations that make cash transactions above the daily cumulative limits would be charged a penal fee of N100 per N1000 and N200 per N1000 for amounts above the cumulative limits for individual and corporate contraventions respectively, the apex bank said. In a strong deterrence to banks, the apex bank said contravention of this policy by any bank shall attract a fine of five times the amount that the bank waives as a first offender and subsequently, the bank shall pay 10 times the charges waived. Also, third-party cheques above N150, 000 shall not be eligible for encashment over the counter as from June 1 2012 as the value for such cheques shall be received through the clearing house.
Where any bank allows thirdparty cheque encashment above the limit, it shall be liable to a sanction of whichever is higher of 10 per cent of the face value of the cheque or N100, 000. The apex bank premised the new policy on the.” increasing dominance of cash in the economy with its implication for cost of cash management to the banking industry, security, money laundering.” and the need to .“reduce the high usage of cash, moderate the cost of cash management and encourage the use of electronic payment channels .”. Banks are also ordered to cease cash in transit lodgment services rendered to merchant customers from June 1, 2012.
He said the CBN should look at the possibility of a higher threshold while also constantly monitoring the implementation of the cash limits to address any emerging adverse effects. CBN had stated that individuals and corporate organizations that make cash transactions above the daily cumulative limits would be charged a penal fee of N100 per N1000 and N200 per N1000 for amounts above the cumulative limits for individual and corporate contraventions respectively, the apex bank said. In a strong deterrence to banks, the apex bank said contravention of this policy by any bank shall attract a fine of five times the amount that the bank waives as a first offender and subsequently, the bank shall pay 10 times the charges waived. Also, third-party cheques above N150, 000 shall not be eligible for encashment over the counter as from June 1 2012 as the value for such cheques shall be received through the clearing house.
Where any bank allows thirdparty cheque encashment above the limit, it shall be liable to a sanction of whichever is higher of 10 per cent of the face value of the cheque or N100, 000. The apex bank premised the new policy on the.” increasing dominance of cash in the economy with its implication for cost of cash management to the banking industry, security, money laundering.” and the need to .“reduce the high usage of cash, moderate the cost of cash management and encourage the use of electronic payment channels .”. Banks are also ordered to cease cash in transit lodgment services rendered to merchant customers from June 1, 2012.
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