Following criticisms that arose from CBN’s re-introduction of cashless police and charges on withdrawals and deposits, the House of reps has acted.
The house of representatives has asked the Central Bank of Nigeria (CBN) to suspend the implementation of cashless policy it recently re-introduced.
The decision by the House was made at the plenary session on Thursday.
The lower legislative chamber said the policy will lead to a significant decrease in credit extension by Nigerian money deposit banks.
The lawmakers also said the policy will have negative impacts on small and medium enterprises “which are clearly the engine room for growth of the economy”.
The suspension, according to the federal parliament, should remain until the apex had made due consultations with all relevant stakeholders.
Call for the suspension was contained in a motion unanimously adopted during Thursday’s plenary, which was moved by Chairman of the House Committee on Media and Public Affairs, Mr Benjamin Kalu.
The motion was entitled, ‘Need to Suspend the Implementation of the Cashless Policy on Deposits by the Central Bank of Nigeria.’
Adopting the motion, the lawmakers resolved to urge the CBN to “suspend the implementation of the cashless policy on deposits which has taken effect from Wednesday, 18th September, 2019, until appropriate and extensive consultative process is concluded.”
They also resolved to mandate the House Committee on Banking and Currency to interface with the CBN to “ascertain the propriety, relevance and the actual need for the implementation of that aspect of the cashless policy at this time, considering the prevailing economic situation of the country and to report back to the House within four weeks.”
Kalu, while moving the motion, said the House was against implementation of the policy as it would cause more hardships for Nigerians.
He said, “The House is deeply worried that the implementation of cashless policy on withdrawals has negative impacts on micro, mini, small and medium scale enterprises, which are clearly the engine room for growth of the economy and employment generation, thereby throwing many of them out of business and sending more Nigerians into poverty. forcing more traders and micro investors to carry cash about with its attendant security challenges.
“The House is aggrieved that while the impact of the cashless policy on withdrawals is still staring us all in our faces as well as other numerous burdensome charges by Nigeria’s Money Deposit Banks heavily impacting on businesses, the CBN deemed it necessary to impose the implementation of cashless policy on depositors ,without due consultations with all shades of stakeholders who will be impacted by the policy.
“The House is concerned that this overbearing burden aimed at closing down majority of micro, mini, small and medium businesses in Nigeria, is also aimed at enriching Nigeria’s Money Deposit Banks owned by a privileged few without any known financial contribution to the Consolidated Revenue Fund of the Federation.”
The lawmaker noted that the policy on cash-based transactions (withdrawals) in banks was aimed at reducing and not eliminating the amount of physical cash (coins and notes) circulating in the economy, and encouraging more electronic-based transactions, including payments for goods and services, and transfers.
The lawmaker explained that the cashless policy was introduced for a number of key reasons, including the need to drive development and modernisation of the country’s payment system, in line with Nigeria’s Vision 2020 goal of being amongst the top 20 economies by the year 2020.
The goal, according to Kalu, is to reduce the cost of banking services, including cost of credit, and drive financial inclusion by providing more efficient transaction options and greater reach.
Recall that in a circular released on Tuesday, the CBN had directed all deposit money banks in the country to charge 3% processing fees for withdrawals and 2% for deposits of amounts above N500,000 for individual accounts.
Corporate account holders will be charged 5% processing fees for withdrawals and 3% for deposits of amounts above N3 million.
The directive was, however, criticised by some Nigerians for various reasons.