Nigeria Exchange
About Us Advertise News Business Addresses Nigeria Events Newspapers Newsletter More
Search Nigeria Sites & Businesses Search Tips

News General Sports Business Odd / Funny Tech Entertainment Articles Author Login Comments More Categories Author List
Author Name: adetutu onadeko
Number of articles: 4
The latest monetary policy by the Central Bank of Nigeria (CBN) aimed at easing pressures on cash transactions... (1) Comment

Email A Friend  |   Print
Nigeria: As trial cashless policy begins
Author: adetutu onadeko | February 27, 2012

The latest monetary policy by the Central Bank of Nigeria (CBN) aimed at easing pressures on cash transactions in the banks has already begun in Lagos. It is known as ‘cashless’ policy. In some other countries operating the system, the policy is called ‘mobile wallet’, which is an alternative payment method that allows a consumer to use mobile phone to pay for a wide range of services. The choice of Lagos as the pilot scheme is understandable. About 65 percent of commercial transactions in the country reportedly take place in Lagos. According to the CBN, the cashless system has become necessary to promote the use of electronic means of transaction towards making Nigeria a cashless economy in the nearest future. CBN says the policy is in reaction to the increasing dominance of cash in the economy with its attendant implications for cost of cash management to the banking industry, security, money laundering, among other huge costs. The policy was endorsed by the Bankers’ Committee, which comprises the CBN, the Nigeria Deposit Insurance Corporation (NDIC), Discount Houses and the 24 commercial banks in the country. Under the policy, effective from June 1, 2012, daily cumulative withdrawals and lodgments in banks by individuals would be limited to a maximum of N150,000, while daily cumulative withdrawals and lodgments by corporate customers is pegged at N1 million. However, individuals and corporate organizations wishing to withdraw above the fixed amount would have to pay special charges. Such special charges are not yet clear. Still, many industry watchers insist that the cashless policy has the benefit to transform the payment system and help the banks, many of which are currently in dire financial straits, reduce operating costs and lending rates. The apex bank has also said that most of the banks are currently incurring ‘excess baggage’ because of unnecessary expenses that are cutting deep into their financial profile and profitability. But this makes special precautions economically appealing and expedient. We are, however, concerned that while this cashless policy has its noble intentions with the ultimate aim of growing our economy and encouraging the emergence of e-payment across the country, the groundwork for the take off of the system has not been sufficiently done. It is one thing to borrow a good idea, but the success of that idea must take into cognizance the peculiar economic environment of the country. No adequate enlightenment has been done before the take off of the policy in Lagos where the scheme is now being put to test. Caution is therefore necessary to avoid any unpleasant consequences such as mass cutback of banks’ staff. As a new phenomenon in Nigeria, if the operational hitches are not taken care of, the noble objective of the scheme will be defeated. That is why many policies that have worked elsewhere in the world have failed in Nigeria. Onadeko Adetutu, Caleb University Lagos

(1) Comment

More From adetutu onadeko


NGEX welcomes and encourages reader comments. Permission to post reader comments is assumed, and we reserve the right to excerpt or edit for clarity any comments that are posted. We won't be able to publish all comments. And we can't vouch for the accuracy of posts from readers. Nickname or Name will be used to identify your post.
OMOTAYO, J. A.    Lagos, NIGERIA    February 29, 2012
This cashless policy is an unnecessary disturbance on our banking sector. In my opinion, it is poorly designed and wrongly timed. Why? First, the e-payment equipment are not locally made. They require deeping into our foreign reserves to purchase. Yet our foreign reserve today is low, very low. Replacement of faulty units will be financed with the low foreign reserves.

Second, the power required for the equipment's efficient operation is unstable. The intermittent switch between generator and public power supplies will cause them to malfunction. Their durability will be shortened. Third, difficulty in making cash payments facilitates the identification of distressed banks by customers and the CBN in the past. E-payment hides this simple but effective factor. Banks distresses will rise as management and staff manipulate their numbers while customers and CBN watch helplessly. Fourth, the CBN has had troubles monitoring banks even with cash transfers. How then can the CBN monitor e-payment? And many more! God save Nigeria.
Results » 1-1 of 1      Result Page »  <   1  >
"The views and opinions expressed in these comment(s) or article(s) do not necessarily reflect the views or opinions of NGEX, its partners or its affiliates."

follow NgEX on Facebook
Submit An Article
"Press Releases"    More »
Abiodun Idris | December 22, 2014
Greatest Nigeria students and masses of our dear country. I want to start this write up by saluting...
Submit A Press Release »
News / Comments   More »
President Muhammadu Buhari's 2016 Budget Speech - “The Budget of Change"
December 22, 2015 | saifullahi h umar gwarzo | 1 posts
Alhamdulillah thanks to allah to help us with great leaders,Ya allah protect them and my country nageria...  Post comment »
26 things you did not know about Nigeria's President-elect Muhammadu Buhari
April 02, 2015 | "Coming In From The Cold" | 1 posts
Welcome on board again, General Muhammadu Buhari (GMB – Great Man Buhari)). My spirit is high and...  Post comment »
Article / Comments   More »
Nigeria: The 19 Northern Governors in the Eyes of the People
August 04, 2011 |  Chioma | 1 posts
This is nothing but the truth.  Post comment »
Why Biafra may be a bad idea
May 25, 2015 |  James Udo Kalu | 1 posts
Is this "coin" having only one side? How is the other side like? May we have a look!  Post comment »
The end of the Goodluck Jonathan nightmare
May 20, 2015 |  Don C | 1 posts
This writer is simply is ignorant as his article. He had in an attempt to appear unbiased brought Ironsi...  Post comment »
Submit An Article
Copyright © 2005 -2013 NgEX. All rights reserved.