Faulting CBN's Rationale For Daily Cash Withdrawal Limits

Faulting CBN's Rationale for Daily Cash Withdrawal Limits.

By Ikechukwu A. Ogu

It is very unfortunate that, without much reflection, the House of Representatives, on Thursday 21st July 2011, reportedly swallowed hook, line and sinker all that the Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, fed it as the rationales for the introduction in Nigeria of Islamic banking and daily cash withdrawal limits. Yet, the House has denied approving Islamic banking and summoned Sanusi to re-appear before it to give further clarifications on same. Although I have my grouse with the introduction of Islamic banking in Nigeria, I leave that for now, and face the daily cash withdrawal limits.

According to the CBN, effective June1, 2012, the maximum amount of cash withdrawable daily across the counter shall be N150,000 for an individual customer, and N1,000,000 for a corporate customer. Any cash withdrawals above the stated limits shall attract a penalty of N100 per every N1,000 and N200 per every N1,000 for individual and corporate customers, respectively.

One expected Sanusi to humbly enlighten Nigerians on whatever informed the policy. Sadly, however, he arrogantly and combatively challenged any aggrieved Nigerian(s) to go to court! Such a high horse is unacceptable from a public officer whose office is a public trust. Should a public officer feel justified in deliberately initiating an unpopular policy only to dare aggrieved persons to go to court? Notwithstanding his credentials and awards, Sanusi owes Nigerians a duty to respectfully explain and justify his official pronouncements and CBN's policies while he is in charge. He has no right to force his views down our throats; such intellectual arrogance is insulting to the sensibilities of average Nigerians. Let us watch it, for haughty postures by public officers would constitute stumbling blocks to the realization of the spirit of the hard-won Freedom of Information Act.

Among the reasons glibly advanced by the CBN for this policy include reducing the cost of cash management, making the Nigerian economy cashless, checking money laundering and the insecurity of cash in transit. I intend, in the next paragraphs, to join many Nigerians to fault these rationalisations and condemn the daily cash withdrawal limits.

First, the elementary role of banks is to take deposits and make same available to depositors on demand, and intermediate between economic sectors having excess funds and those lacking enough funds by mobilizing funds for the latter. Where a bank fails to pay depositors on demand, it is a sign that it has liquidity problems and calls for the intervention of the regulators. Thus, the obligation of a bank to honour a depositor's demand for payment is legally binding, provided the depositor has enough credit balance in his account and the cheque/withdrawal slip is in order.

Again, banks traditionally charge commissions on transactions (COTs) on lodgements into and withdrawals from current accounts. And Nigerian banks have, with CBN's tacit approval, been imposing on their customers similar COTs for withdrawals from savings accounts, "cash handling charges" for withdrawals of N1m and above, and other inexplicable and unjust charges. So, what "cost of cash management" does the CBN refer to? Nigerian banks, arbitrarily and amidst regulatory inertia, do handsomely reward themselves for cash management and "cash handling". It is even outlandish that a bank whose core duty is to handle cash imposes "cash handling charges" on its customers. But this is Nigeria. Thus, the reason of "cost of cash management" offered by the CBN is not convincing.

The CBN's rhetoric of making the Nigerian economy cashless may be melodious. But that is placing the cart before the horse, an undue haste to run without first crawling. What foundations exist in Nigeria for the take-off of a cashless economy? What is the level of literacy and acquaintance with information communication technology (ICT) among Nigerians? How many Nigerians can use electronic banking services? How many Igbo traders, Fulani herdsmen, market women, farmers, etc are knowledgeable in ICT? What infrastructures are there to support electronic banking, assuming most Nigerians are educated and ICT-compliant? Is it enough to flood nooks and crannies with ATMs, with their vulnerability to fraud unresolved?

Why do our public officials waste so much energy, scarce public resources and time theorizing on how an unprepared Nigeria can outstrip the advanced economies overnight? Why do we always transplant policies and programmes from other climes unto an unripe Nigerian environment? Is the World Bank's approval of the policy enough reason for us to jump on the bandwagon? Tell me, how did Nigeria fare under the Structural Adjustment Programme (SAP) prescribed by the World Bank and IMF?

Very importantly, beyond platitudes, how will the hyped "cashless economy", in real terms, benefit poor Nigerians or transform Nigeria into an El Dorado? Will Nigeria actualize its Vision 20-20-20 and join the league of First World countries by merely operating a "cashless economy"? For God's sake, Nigerians are in dire need of basic amenities, and not rhetorics on the vague "international best practices".

The issue of reducing the incidence of insecurity of cash in transit sounds good, but is equally unconvincing. Is it not the same CBN which earlier disapproved of banks opening ATM machines outside their branches for security reasons that suddenly did a volte-face on that? What directives has it given to banks on how to ensure security at their ATMs sites? Has the CBN solved the persistent fraud associated with ATM transactions? Nigerians have been taking care of the security challenges regarding cash in transit, and should be allowed to deposit and withdraw cash as they deem fit.

I consider as very improper the use of regulatory or legislative fiat to limit daily cash withdrawals by bank customers. Whose money are depositors withdrawing? Worse still, it is unpardonable to penalize them for withdrawing above a particular limit. By that, the CBN has given a fillip to our banks' predatory charges against which Nigerians have complained on end without any regulatory action. Perhaps, the CBN may soon limit the daily amount to be deposited in banks owing to "cost of cash management".

I do not see the connection between the amount of cash withdrawn from banks by customers and the incidence of money laundering. As much as I know, much of money laundering is done electronically through banks. Let somebody tell me how our corrupt politicians transfer looted funds to overseas bank accounts.

It is doubtful that the CBN weighed the implications of this policy before resolving to impose it on Nigerians. People patronize banks to avoid theft and other risks when money is hoarded at home and offices, as happened to the gold coins of the protagonist in George Elliot's novel Silas Marner. However, by this new policy, the CBN is throwing many Nigerians back to the ugly practice of hoarding money.

There are so many transactions involving huge sums of money whereof the average Nigerian cannot accept deferred payment, either by cheque or lodgement into his account. The recurring incidence of dishonoured cheques has made the average Nigerian very suspicious of payment by negotiable instruments. Again, the high level of illiteracy among Nigerians makes the use of cheques and electronic payments unsuitable in some cases. Tell me, how else does one pay an illiterate Fulani herdsman for cow(s) bought except in cash? How would Nigerians in the rural areas handle cash payments involving huge sums of money? How convenient is it for one to spread his withdrawals in order to meet a transaction whereof time is of the essence? What of the cost of visiting the bank/ATM daily to withdraw N150,000 for such transaction? Why should one be penalized for making a huge withdrawal to attend to one's needs? Depositors withdrawing huge sums should not be forced to incur additional cost by using cash-in-transit (CIT) companies.

I am unable to see any benefits this policy portends for the Nigerian economy and citizenry. If any, they are outweighed by its demerits. The reported plan by some Nigerian banks to lay off bulk tellers – and boost the unemployment market - may not be unconnected with this condemnable policy. The CBN should rather tackle the recurring incidence of unjust, inexplicable charges and sharp practices for which Nigerian banks are now notorious. It should equally solve the seemingly intractable fraud associated with ATMs and other electronic banking transactions. The government should direct the CBN to urgently retrace its steps and reverse this objectionable policy.

, a legal practitioner, writes from Central Business District, Abuja (ikechukwuogu@yahoo.com).



1
Re: Faulting CBN
Enyi posted on 08-06-2011, 05:18:01 AM
@Patcho
No, you do not have to visit your bank 4 times in 4 days. You can write a cheque or use money transfer. Take it from me I have done these many times.
@Ikechukwu Ogu
CBN is not insisting on electronic banking. Indeed, I do not use electronic banking because I have a phobia about Internet fraud. The new policy will go a long way in fighting financial crimes. Personally, I believe this is long overdue. I was astonished to read many years ago that a certain Minister allegedly withdrew 50 million cash from CBN for the sole purpose of bribing senators. I suspect that this could not be proved in court because of lack of trails.
Secondly, have you considered the security problems created by carrying large sums of money? How many lives have been lost as a result of this practice?
It is not the responsibility of CBN to provide security for ATM sites or amenity for the general population. This falls squarely within the responsibilities of the various governments.

"There are so many transactions involving huge sums of money whereof the average Nigerian cannot accept deferred payment, either by cheque or lodgement into his account".

Can you provide examples of such transactions?

"The recurring incidence of dishonoured cheques has made the average Nigerian very suspicious of payment by negotiable instruments".

As far as I know, most businesses, except for life and death situations, most businesses will not offer services or goods until the cheque is cleared.
"Again, the high level of illiteracy among Nigerians makes the use of cheques and electronic payments unsuitable in some cases"

How did you arrive at the conclusion that there is a high level of illiteracy among Nigerians? What is the true rate of illiteracy in Nigeria? Are you sure you are not underestimating Nigerians?

It is the responsibility of every one of us to educate our illiterate relatives on how the implementation of the new policy.
It seems we have a penchant for resisting changes in Nigeria. I recall that after Ghana started football league, there was a call for us to do the same. This was resisted on the flimsy excuse that we were not yet ripe for it. After Ghana walloped us (I think it was 7-0), we suddenly became ripe for leagues. Please, let's give it a trial. The benefits far outweigh the disadvantages.
Re: Faulting CBN
Patcho posted on 08-06-2011, 06:01:59 AM
@Enyi:
"No, you do not have to visit your bank 4 times in 4 days. You can write a cheque or use money transfer. Take it from me I have done these many times."

Somethings need immediacy. Most of your suggestions above on cheque did not take care of time and down payment for transactions. I support ceiling on withdrawals but 150,000 Naira {about USD1000} beats me.
In Japan, you can withdraw at ATM up to a million Yen {USD12,000} per day but if you want more than this, you can fill in a form and withdraw as many cash as you want off the counter. Similar situation exists in remittances.
To argue that we educate our "illiterate relatives" is a no brainer--sorry to say....Those relatives have enough intelligence to understand their environment and practically operates based what is and not how it should be.

That it was done to check money laundering is nonsense as there are many roads to launder money. If it was done for security, that is no CBN duty like you rightly stated.

Some policy like this one would simply fatten the wallets of Bank Managers who for some percentage will bring whatever amount you need {afterall, the money is yours in the first place} in your home late in the evening.
Re: Faulting CBN
Enyi posted on 08-06-2011, 07:18:17 AM
[QUOTE=Patcho;564945]@Enyi:
"No, you do not have to visit your bank 4 times in 4 days. You can write a cheque or use money transfer. Take it from me I have done these many times."

It will be helpful if you can cite concrete examples. In my day to day activities I have not been faced with the situation you have mentioned. What is wrong with making a down payment of 50,000? I guess that down payment is a token of one's committal to the deal. I must repeat that I have used cheques and bank transfers in many deals in Nigeria without hitch. Frankly, I avoid carrying lots of cash

I support ceiling on withdrawals

At least we agree on this.

but 150,000 Naira {about USD1000} beats me.

Our disagreement which is minimal now is on the amount. I do not consider 150,000 sacrosanct. It can be increased.

In Japan, you can withdraw at ATM up to a million Yen {USD12,000} per day but if you want more than this, you can fill in a form and withdraw as many cash as you want off the counter. Similar situation exists in remittances.

Thanks for this information. I guess that every country makes laws according to the prevailing situation. It will be interesting to know if the ceiling on cash withdrawal in US, UK and Europe is as high as in Japan. I hope Villagers in these places will put in a word or two on this.

To argue that we educate our "illiterate relatives" is a no brainer--sorry to say....Those relatives have enough intelligence to understand their environment and practially operates based what is and not how it should be.

Again, I am sorry we shall disagree on this. I remember as a child, my now late grand-mother who could not read English used to ask me to translate for her letters in English whenever she got them. She would also dictate letters in Igbo and I composed them in English for her. This was how she got around communicating in English with people who were far away. So when I mentioned educating our "illiterate relatives" I was only referring to giving them tips on how to get around the problem. I presume it will not be easy because of the level of 419 in the country but where there is a will there is a way.

That it was done to check money laundering is nonsense as there are many roads to launder money.

I am not sure whether you are using money laundering in a broad sense. I had used the term financial crimes. In this era of terrorism (what else can one call Boko Haram?), and insane looting of our treasure, don't you thing that this will help in fighting these monsters?

If it was done for security, that is no CBN duty like you rightly stated.

Another point of agreement.

Some policy like this one would simply fatten the wallets of Bank Managers who for some percentage will bring whatever amount you need {afterall, the money is yours in the first place} in your home late in the evening.

This will happen if we decide not to obey the law. Let me repeat once more that I have not had any problem using cheques and money transfers for business deals in Nigeria. Frankly, I often wonder how people feel comfortable when they carry large sums of money. I recall in my earlier years of economic slavery when there was neither Western Union nor functional domiciliary account, many of us often had sleepless nights each time we returned to Nigeria. Indeed, until we disposed of cash-both ours and friends'- we felt uneasy.
Re: Faulting CBN
Patcho posted on 08-06-2011, 07:57:59 AM
" many of us often had sleepless nights each time we returned to Nigeria. Indeed, until we disposed of cash-both ours and friends'- we felt uneasy."

Your sleepless nights is not because of the cash with you but mainly due to lack of security. People host same fear when they're in Nigeria today because they may be kidnapped.

On the whole, in an urbane setting, cheque or draft transactions are always better.
Re: Faulting CBN
Justan234 posted on 08-06-2011, 09:06:48 AM
The daily limit in the U.S for a checking account is about 700/800 usd. You have to specifically request that they increase it and I suspect beyond a certain amount, your account would get flagged as suspicious and the fbi etc would keep tabs on you from then on.
Re: Faulting CBN's Rationale For Daily Cash Withdrawal Limits
Tit posted on 08-06-2011, 10:59:39 AM
i know of $10,000 daily limit checking accounts.
more importantly, there are no fetters to how you handle your legitimate private interest. no penalties for getting your cash. yes, the relevant authorities will be informed for your protection (like you are being blackmailed) and to protect the public against ills of money laundering.
Faulting CBN's Rationale For Daily Cash Withdrawal Limits
Ikechukwu A. Ogu posted on 08-06-2011, 15:38:00 PM
Faulting CBN's Rationale for Daily Cash Withdrawal Limits.

By Ikechukwu A. Ogu

It is very unfortunate that, without much reflection, the House of Representatives, on Thursday 21st July 2011, reportedly swallowed hook, line and sinker all that the Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, fed it as the rationales for the introduction in Nigeria of Islamic banking and daily cash withdrawal limits. Yet, the House has denied approving Islamic banking and summoned Sanusi to re-appear before it to give further clarifications on same. Although I have my grouse with the introduction of Islamic banking in Nigeria, I leave that for now, and face the daily cash withdrawal limits.

According to the CBN, effective June1, 2012, the maximum amount of cash withdrawable daily across the counter shall be N150,000 for an individual customer, and N1,000,000 for a corporate customer. Any cash withdrawals above the stated limits shall attract a penalty of N100 per every N1,000 and N200 per every N1,000 for individual and corporate customers, respectively.

One expected Sanusi to humbly enlighten Nigerians on whatever informed the policy. Sadly, however, he arrogantly and combatively challenged any aggrieved Nigerian(s) to go to court! Such a high horse is unacceptable from a public officer whose office is a public trust. Should a public officer feel justified in deliberately initiating an unpopular policy only to dare aggrieved persons to go to court? Notwithstanding his credentials and awards, Sanusi owes Nigerians a duty to respectfully explain and justify his official pronouncements and CBN's policies while he is in charge. He has no right to force his views down our throats; such intellectual arrogance is insulting to the sensibilities of average Nigerians. Let us watch it, for haughty postures by public officers would constitute stumbling blocks to the realization of the spirit of the hard-won Freedom of Information Act.

Among the reasons glibly advanced by the CBN for this policy include reducing the cost of cash management, making the Nigerian economy cashless, checking money laundering and the insecurity of cash in transit. I intend, in the next paragraphs, to join many Nigerians to fault these rationalisations and condemn the daily cash withdrawal limits.

First, the elementary role of banks is to take deposits and make same available to depositors on demand, and intermediate between economic sectors having excess funds and those lacking enough funds by mobilizing funds for the latter. Where a bank fails to pay depositors on demand, it is a sign that it has liquidity problems and calls for the intervention of the regulators. Thus, the obligation of a bank to honour a depositor's demand for payment is legally binding, provided the depositor has enough credit balance in his account and the cheque/withdrawal slip is in order.

Again, banks traditionally charge commissions on transactions (COTs) on lodgements into and withdrawals from current accounts. And Nigerian banks have, with CBN's tacit approval, been imposing on their customers similar COTs for withdrawals from savings accounts, "cash handling charges" for withdrawals of N1m and above, and other inexplicable and unjust charges. So, what "cost of cash management" does the CBN refer to? Nigerian banks, arbitrarily and amidst regulatory inertia, do handsomely reward themselves for cash management and "cash handling". It is even outlandish that a bank whose core duty is to handle cash imposes "cash handling charges" on its customers. But this is Nigeria. Thus, the reason of "cost of cash management" offered by the CBN is not convincing.

The CBN's rhetoric of making the Nigerian economy cashless may be melodious. But that is placing the cart before the horse, an undue haste to run without first crawling. What foundations exist in Nigeria for the take-off of a cashless economy? What is the level of literacy and acquaintance with information communication technology (ICT) among Nigerians? How many Nigerians can use electronic banking services? How many Igbo traders, Fulani herdsmen, market women, farmers, etc are knowledgeable in ICT? What infrastructures are there to support electronic banking, assuming most Nigerians are educated and ICT-compliant? Is it enough to flood nooks and crannies with ATMs, with their vulnerability to fraud unresolved?

Why do our public officials waste so much energy, scarce public resources and time theorizing on how an unprepared Nigeria can outstrip the advanced economies overnight? Why do we always transplant policies and programmes from other climes unto an unripe Nigerian environment? Is the World Bank's approval of the policy enough reason for us to jump on the bandwagon? Tell me, how did Nigeria fare under the Structural Adjustment Programme (SAP) prescribed by the World Bank and IMF?

Very importantly, beyond platitudes, how will the hyped "cashless economy", in real terms, benefit poor Nigerians or transform Nigeria into an El Dorado? Will Nigeria actualize its Vision 20-20-20 and join the league of First World countries by merely operating a "cashless economy"? For God's sake, Nigerians are in dire need of basic amenities, and not rhetorics on the vague "international best practices".

The issue of reducing the incidence of insecurity of cash in transit sounds good, but is equally unconvincing. Is it not the same CBN which earlier disapproved of banks opening ATM machines outside their branches for security reasons that suddenly did a volte-face on that? What directives has it given to banks on how to ensure security at their ATMs sites? Has the CBN solved the persistent fraud associated with ATM transactions? Nigerians have been taking care of the security challenges regarding cash in transit, and should be allowed to deposit and withdraw cash as they deem fit.

I consider as very improper the use of regulatory or legislative fiat to limit daily cash withdrawals by bank customers. Whose money are depositors withdrawing? Worse still, it is unpardonable to penalize them for withdrawing above a particular limit. By that, the CBN has given a fillip to our banks' predatory charges against which Nigerians have complained on end without any regulatory action. Perhaps, the CBN may soon limit the daily amount to be deposited in banks owing to "cost of cash management".

I do not see the connection between the amount of cash withdrawn from banks by customers and the incidence of money laundering. As much as I know, much of money laundering is done electronically through banks. Let somebody tell me how our corrupt politicians transfer looted funds to overseas bank accounts.

It is doubtful that the CBN weighed the implications of this policy before resolving to impose it on Nigerians. People patronize banks to avoid theft and other risks when money is hoarded at home and offices, as happened to the gold coins of the protagonist in George Elliot's novel Silas Marner. However, by this new policy, the CBN is throwing many Nigerians back to the ugly practice of hoarding money.

There are so many transactions involving huge sums of money whereof the average Nigerian cannot accept deferred payment, either by cheque or lodgement into his account. The recurring incidence of dishonoured cheques has made the average Nigerian very suspicious of payment by negotiable instruments. Again, the high level of illiteracy among Nigerians makes the use of cheques and electronic payments unsuitable in some cases. Tell me, how else does one pay an illiterate Fulani herdsman for cow(s) bought except in cash? How would Nigerians in the rural areas handle cash payments involving huge sums of money? How convenient is it for one to spread his withdrawals in order to meet a transaction whereof time is of the essence? What of the cost of visiting the bank/ATM daily to withdraw N150,000 for such transaction? Why should one be penalized for making a huge withdrawal to attend to one's needs? Depositors withdrawing huge sums should not be forced to incur additional cost by using cash-in-transit (CIT) companies.

I am unable to see any benefits this policy portends for the Nigerian economy and citizenry. If any, they are outweighed by its demerits. The reported plan by some Nigerian banks to lay off bulk tellers – and boost the unemployment market - may not be unconnected with this condemnable policy. The CBN should rather tackle the recurring incidence of unjust, inexplicable charges and sharp practices for which Nigerian banks are now notorious. It should equally solve the seemingly intractable fraud associated with ATMs and other electronic banking transactions. The government should direct the CBN to urgently retrace its steps and reverse this objectionable policy.

, a legal practitioner, writes from Central Business District, Abuja (ikechukwuogu@yahoo.com).

Read full article
Faulting CBN's Rationale For Daily Cash Withdrawal Limits
Ikechukwu A. Ogu posted on 08-06-2011, 15:38:00 PM

Faulting CBN's Rationale for Daily Cash Withdrawal Limits.


By Ikechukwu A. Ogu


It is very unfortunate that, without much reflection, the House of Representatives, on Thursday 21st July 2011, reportedly swallowed hook, line and sinker all that the Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, fed it as the rationales for the introduction in Nigeria of Islamic banking and daily cash withdrawal limits. Yet, the House has denied approving Islamic banking and summoned Sanusi to re-appear before it to give further clarifications on same. Although I have my grouse with the introduction of Islamic banking in Nigeria, I leave that for now, and face the daily cash withdrawal limits.


According to the CBN, effective June1, 2012, the maximum amount of cash withdrawable daily across the counter shall be N150,000 for an individual customer, and N1,000,000 for a corporate customer. Any cash withdrawals above the stated limits shall attract a penalty of N100 per every N1,000 and N200 per every N1,000 for individual and corporate customers, respectively.


One expected Sanusi to humbly enlighten Nigerians on whatever informed the policy. Sadly, however, he arrogantly and combatively challenged any aggrieved Nigerian(s) to go to court! Such a high horse is unacceptable from a public officer whose office is a public trust. Should a public officer feel justified in deliberately initiating an unpopular policy only to dare aggrieved persons to go to court? Notwithstanding his credentials and awards, Sanusi owes Nigerians a duty to respectfully explain and justify his official pronouncements and CBN's policies while he is in charge. He has no right to force his views down our throats; such intellectual arrogance is insulting to the sensibilities of average Nigerians. Let us watch it, for haughty postures by public officers would constitute stumbling blocks to the realization of the spirit of the hard-won Freedom of Information Act.


Among the reasons glibly advanced by the CBN for this policy include reducing the cost of cash management, making the Nigerian economy cashless, checking money laundering and the insecurity of cash in transit. I intend, in the next paragraphs, to join many Nigerians to fault these rationalisations and condemn the daily cash withdrawal limits.


First, the elementary role of banks is to take deposits and make same available to depositors on demand, and intermediate between economic sectors having excess funds and those lacking enough funds by mobilizing funds for the latter. Where a bank fails to pay depositors on demand, it is a sign that it has liquidity problems and calls for the intervention of the regulators. Thus, the obligation of a bank to honour a depositor's demand for payment is legally binding, provided the depositor has enough credit balance in his account and the cheque/withdrawal slip is in order.


Again, banks traditionally charge commissions on transactions (COTs) on lodgements into and withdrawals from current accounts. And Nigerian banks have, with CBN's tacit approval, been imposing on their customers similar COTs for withdrawals from savings accounts, "cash handling charges" for withdrawals of N1m and above, and other inexplicable and unjust charges. So, what "cost of cash management" does the CBN refer to? Nigerian banks, arbitrarily and amidst regulatory inertia, do handsomely reward themselves for cash management and "cash handling". It is even outlandish that a bank whose core duty is to handle cash imposes "cash handling charges" on its customers. But this is Nigeria. Thus, the reason of "cost of cash management" offered by the CBN is not convincing.


The CBN's rhetoric of making the Nigerian economy cashless may be melodious. But that is placing the cart before the horse, an undue haste to run without first crawling. What foundations exist in Nigeria for the take-off of a cashless economy? What is the level of literacy and acquaintance with information communication technology (ICT) among Nigerians? How many Nigerians can use electronic banking services? How many Igbo traders, Fulani herdsmen, market women, farmers, etc are knowledgeable in ICT? What infrastructures are there to support electronic banking, assuming most Nigerians are educated and ICT-compliant? Is it enough to flood nooks and crannies with ATMs, with their vulnerability to fraud unresolved?


Why do our public officials waste so much energy, scarce public resources and time theorizing on how an unprepared Nigeria can outstrip the advanced economies overnight? Why do we always transplant policies and programmes from other climes unto an unripe Nigerian environment? Is the World Bank's approval of the policy enough reason for us to jump on the bandwagon? Tell me, how did Nigeria fare under the Structural Adjustment Programme (SAP) prescribed by the World Bank and IMF?


Very importantly, beyond platitudes, how will the hyped "cashless economy", in real terms, benefit poor Nigerians or transform Nigeria into an El Dorado? Will Nigeria actualize its Vision 20-20-20 and join the league of First World countries by merely operating a "cashless economy"? For God's sake, Nigerians are in dire need of basic amenities, and not rhetorics on the vague "international best practices".


The issue of reducing the incidence of insecurity of cash in transit sounds good, but is equally unconvincing. Is it not the same CBN which earlier disapproved of banks opening ATM machines outside their branches for security reasons that suddenly did a volte-face on that? What directives has it given to banks on how to ensure security at their ATMs sites? Has the CBN solved the persistent fraud associated with ATM transactions? Nigerians have been taking care of the security challenges regarding cash in transit, and should be allowed to deposit and withdraw cash as they deem fit.


I consider as very improper the use of regulatory or legislative fiat to limit daily cash withdrawals by bank customers. Whose money are depositors withdrawing? Worse still, it is unpardonable to penalize them for withdrawing above a particular limit. By that, the CBN has given a fillip to our banks' predatory charges against which Nigerians have complained on end without any regulatory action. Perhaps, the CBN may soon limit the daily amount to be deposited in banks owing to "cost of cash management".


I do not see the connection between the amount of cash withdrawn from banks by customers and the incidence of money laundering. As much as I know, much of money laundering is done electronically through banks. Let somebody tell me how our corrupt politicians transfer looted funds to overseas bank accounts.


It is doubtful that the CBN weighed the implications of this policy before resolving to impose it on Nigerians. People patronize banks to avoid theft and other risks when money is hoarded at home and offices, as happened to the gold coins of the protagonist in George Elliot's novel Silas Marner. However, by this new policy, the CBN is throwing many Nigerians back to the ugly practice of hoarding money.


There are so many transactions involving huge sums of money whereof the average Nigerian cannot accept deferred payment, either by cheque or lodgement into his account. The recurring incidence of dishonoured cheques has made the average Nigerian very suspicious of payment by negotiable instruments. Again, the high level of illiteracy among Nigerians makes the use of cheques and electronic payments unsuitable in some cases. Tell me, how else does one pay an illiterate Fulani herdsman for cow(s) bought except in cash? How would Nigerians in the rural areas handle cash payments involving huge sums of money? How convenient is it for one to spread his withdrawals in order to meet a transaction whereof time is of the essence? What of the cost of visiting the bank/ATM daily to withdraw N150,000 for such transaction? Why should one be penalized for making a huge withdrawal to attend to one's needs? Depositors withdrawing huge sums should not be forced to incur additional cost by using cash-in-transit (CIT) companies.


I am unable to see any benefits this policy portends for the Nigerian economy and citizenry. If any, they are outweighed by its demerits. The reported plan by some Nigerian banks to lay off bulk tellers – and boost the unemployment market - may not be unconnected with this condemnable policy. The CBN should rather tackle the recurring incidence of unjust, inexplicable charges and sharp practices for which Nigerian banks are now notorious. It should equally solve the seemingly intractable fraud associated with ATMs and other electronic banking transactions. The government should direct the CBN to urgently retrace its steps and reverse this objectionable policy.


, a legal practitioner, writes from Central Business District, Abuja (ikechukwuogu@yahoo.com).



..Read the full article
Re: Faulting CBN
Patcho posted on 08-06-2011, 18:09:00 PM
Tit: Where is that...USA?
1
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