Cash-lite : Charges apply in FCT, 5 more states tomorrow

Although the cash-lite policy of the Central Bank of Nigeria (CBN) was extended to six more states in July, charges will begin to apply in the Federal Capital Territory, Abia, Anambra, Kano, Rivers and Ogun states from tomorrow October 1, 2013.

The CBN had delayed the application of charges for three months to allow for extensive sensitisation and allow bank customers in these states get acclimatised with the policy. The apex bank had selected the six states due to the large volume of transactions in the states.

The Deputy Governor, Operations, CBN, Mr Tunde Lemo, had at a public forum, explained that “when we talk about nationwide roll-out, we are also being careful to ensure that we make use of resources in a smart way. Cash doesn’t flow in the same volume in every state of the federation. What we would do in July is to look at those other market clusters where large volumes are transacted and add them to Lagos.

“It is cheaper that way because resources needed to cover the entire 923 square kilometres in Nigeria are huge. But you can achieve almost the same thing by looking at the pattern of cash distribution and you can cover about 90 per cent of that by adding more locations to Lagos.

“That is basically what we want to do. We would get those clusters and add them to Lagos. When we add those locations to Lagos, then we would have covered about 90 per cent of the cash volume. We would see how far that goes and once we perfect that, we then begin to look at the contiguous.”

The Cash-lite policy, which began in Lagos in January 2012, is aimed at reducing the dominance of cash in the system. The policy specifies penal charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits.      

According to CBN’s Director, Communications, Ugochukwu Okoroafor, there is need for more enlightenment on the policy as awareness was one of the challenges the bank had to tackle during the pilot stage in Lagos.

“We must strive to move forward and we are doing everything to ensure that we carry everybody along. This is what is being done in only five states, including the Federal Capital Territoryand Lagos now. In the next round, we will go across the nation and we are going to do it quickly as soon as we have addressed some of the basic challenges.

“There will continue to be challenges in infrastructure, technology, manpower, geography. There are so many things that will continue to pose challenges, but we cannot just stop because there are challenges; all we have to do is to keep up with the challenges and make sure that things go well,” he said