NIGERIA: CBN Upbeat as Cashless Policy Moves to Abuja, Five Other States Monday

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Notwithstanding last week’s call by some members of the House of Representatives for the implementation of the cashless policy in phases, the Central Bank of Nigeria (CBN) at weekend, maintained that the policy would be extended to the Federal Capital Territory (FCT) and five other states from Monday.

The states include Rivers, Kano, Anambra, Ogun and Abia.

This came as the bank at the weekend warned those travelling in and out of the country that it is mandatory for holders of cash or negotiable instruments in excess of $10,000 to always declare such amount of funds to the Nigeria Customs Service (NCS) at various airports.

Speaking in an exclusive interview with THISDAY in Lagos, the Deputy Governor (Operations), CBN, Mr. Tunde Lemo, expressed optimism that just like in Lagos State, the initiative, aimed at reducing the dominance of cash in the economy, would also be successful in these states.

The cashless policy was introduced in Lagos in January last year. It specifies charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits. Under the policy, the CBN pegged the daily cumulative cash withdrawal or deposit limit for individual accounts at N500,000 per day and N3 million per day for corporate accounts.

However, the House of Representatives had urged the apex bank to implement the cashless policy in phases.

The motion, promoted by 53 lawmakers, titled: “Need for CBN to Implement Cashless Policy in Phases,” sought to make the apex bank implement the policy in stages, moving from what they described as cash-based to cash-less and finally cashless.

But Lemo explained: “I have a lot of respect for members of the National Assembly, but I think we need to dialogue further for them to know that nothing is changing where we said we are introducing cashless. All of what we are saying is that because of the need to save money and to modernise our payment system, banks are now beginning to say that they will be charging heavy cash users and not allow the poor man to subsidise the expensive lifestyle of the rich man.

“If you look around the world, there is no country where people will go to the bank to collect the kind of money we collect in Nigeria and this cost a lot money. It cost money to process and move cash. In those days, what we did was to put all of that together as banking charges and everybody is bears the charges. But from July 1, in those other new states, we will raise the level of awareness and let them know that banks will no longer subsidise heavy cash users.

“If the lifestyle will continue, then they will have to bear the associated cost. Nothing is changing; it is not as if we are saying
there won’t be cash in those areas, no! The choice is yours. If you still want to carry heavy amount of cash, you can, but bear in mind that the associated cost of carrying heavy amount of cash will be borne by you.”

Meanwhile, in a circular dated June 26 and addressed to all banks and Other Financial Institutions (OFIs), a copy of which was posted on its website, the apex bank all intending travellers to declare any cask in excess of $10,000.

The document signed by Y.B. Duniya on behalf of the acting Director, Financial Policy and Regulation Depart, CBN, said market information at the disposal of the l bank on the implementation and enforcement of section 2 of the Money Laundering (Prohibition) Act (MLPA), 2011 (as amended) had revealed some misinterpretation/misapplication of the provision to mean that carrying of funds/negotiable instruments to or from a foreign country in excess of $10,000 or its equivalent was prohibited.

It therefore stated that it was pertinent to provide guidance to banks and OFIs on the provision of the section.

It stressed that section 2(3) of the MLPA, 2011 (as amended) provides that transportation of cash or negotiable instruments in excess of $10,000 or its equivalent by individuals in or out of the country should be declared to the NCS, while section 2(5) provides that any person who falsely declares or fails to make a declaration to the NCS pursuant to section 12 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, Cap. F34, LFN, 2004 is guilty of an offence and shall be liable on conviction to forfeit the undeclared funds or instruments or to imprisonment of not less than two year or to both.

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