on MAY 25, 2011 · in BUSINESS

Abuja – CBN governor, Malam Sanusi Lamido Sanusi, said in Abuja on Tuesday that the bank would test-run its cash transaction limit policy in Lagos in the next six months.

The policy, which pegs cash transactions at an initial N150,000 takes effect from June 2012.

“What we are going to do for the next six months, we have what we call a project `Cashless Lagos’, we’ll bring Lagos up as a model; you’ll see the ATM density; we are going to work with telecoms companies and you find that you go to Lagos and do your business with cards.

“The people complaining about the N150,000 go to England, and go to America, they use cards; they use the internet; they use telephone banking. When they come to Nigeria, they want to carry millions of Naira in `Ghana-must-go’ bags.’’

Sanusi stressed that measures must be put in place to fight money laundering and corruption to transform the economy.

He said that the bank would continue to sensitise the people about the policy and be flexible about the limit.

“It can be N150,000 or N300,000. We can talk about the charges, these are not things that are cast in stone, but the important thing is the principle. There will be cash limits and we are going to move transaction away from cash to electronic banking,’’ he said.

He assured that there would be regular public discussions and that appropriate measures would be taken before the implementation time.

Sanusi said that the policy was one aspect of the programme of mordernising the financial system in the country, adding that the only way to move the nation from cashless economy was to invest in it and make regulation to support it.

He said: “this policy will take effect from June 2012; we did not say there is a limit to N150 000, we simply said that if you want to cash more than that, it is just more expensive.

“We have looked at the data, throughout last year, less than eight per cent of cash transaction in Nigeria was more than N150, 000.’’

The governor said that it cost the bank about N200 billion to print money, secure, transport, destroy and process it.

He noted that the top seven banks in the country spent about N100 billion on cash management annually.

“This is a major drain to the economy,’’ he stressed. (NAN

http://www.vanguardngr.com/2011/05/cbn-to-test-run-cash-transaction-limit-policy-in-lagos/

My intuition at first was that this is a bad idea, and will encourage people to keep more money outside of the banking system. Who wants to pay fees to deposit/withdraw money in the bank?

I still think this is a bad idea. We shall see, I guess.

I also think it is a bad idea but i also stand to be corrected

It just feels to me that if you have any type of store that does more than N150K of business a day (or I guess N1 million is the corporate limit), then it means such businesses have to pay a a fee to deposit their cash into the bank.

So I guess they'll encourage their buyers to go cashless. But if you are doing N1 million of rice, beans, t-shirts, etc per day, then how on earth will you convince your buyers to go cashless?

Is it easy for your average Nigerian to buy say N1000 worth of stuff without cash?

Guys, did you read what the governor said, less than eight percent of transactions, the cost of printing money and cost of handling money by banks, you guys are capitalists to the core and you are going against a money management scheme, it is a very good idea and should be implemented, we do not like change in Nigeria except it is forced down our throats, we should be happy that we have someone who truly loves his job and is honest about it; pushing positive change.

hercules07:

Guys, did you read what the governor said, less than eight percent of transactions, the cost of printing money and cost of handling money by banks, you guys are capitalists to the core and you are going against a money management scheme, it is a very good idea and should be implemented, we do not like change in Nigeria except it is forced down our throats, we should be happy that we have someone who truly loves his job and is honest about it; pushing positive change.

I understand that only a small fraction of transactions (8%) are above this 150k limit.

But of these 8%, how many are (A) someone buying a brand new SUV with cash only, versus (B) some small shop owner selling N150K worth of rice in a day.

I can see how it makes sense to encourage guy (A) to go cashless. . . whoever is selling the car won't accept cash again.

But in the case of (B), what does the small shop owner do? Probably most of his customers buy rice from him with cash. If he has to pay additional fees to deposit the money he earns, he'll make up the difference through charging extra to his customers I guess (at least those who buy rice from him with cash.) You sort of see what I'm saying? How easy is it to do these small transactions in Nigeria (N1000 of rice) without cash? If it is hard, then guy (B) and his customers will suffer.

He can get a bloody POS, I was on my way to dubai and was very hungry, I had no money on me but had my debit cards, I entered one of the eateries in the airport and paid with my debit card, food was less than 2K, if I can pay for food with a card, a rice seller can get a POS as well, the wireless internet access in Lagos is getting better and we need to take advantage of this.

He can get a bloody POS, I was on my way to dubai and was very hungry, I had no money on me but had my debit cards, I entered one of the eateries in the airport and paid with my debit card, food was less than 2K, if I can pay for food with a card, a rice seller can get a POS as well, the wireless internet access in Lagos is getting better and we need to take advantage of this.

Lets not be in a haste to compare and conclude.A cashless economy is a good one and evolves gradually through proper and targeted enlightenment programs.Deploying the POS is not enough, ensuring that they are adequate and functioning continuously is also part of it.

The critical component technology wise will be the service providers and from what we can see, they are improving, what is needed is probably less than 16Kbytes of data for the transaction to go through, this is such a puny amount that our providers should cover their heads in shame if they can not provide it.
I am 1000% in support of this as I hate carrying cash and try as much as possible to do most of my transactions electronically.

It is no doubt a laudable scheme, but other critical infrastructure that would aid it have to be working seamlessly 1st. The telecoms & internet in this country are still in shambles as far as im concerned. Just a few days ago, i went somewhere and had a bill of about 3k. i didnt have enough cash and asked for their POS. They had about 5 and non of them were working! No network!!! i had to drive to the closest ATM, about 10 mins away to get cash. so i believe for this to work, power & telecoms have to get to a fairly reasonable working level.

I'm now convinced that Sanusi Lamido Sanusi has lost his marbles and does not deserve, on merit, to be the Governor of a primary school, talk less of the Central Bank of Nigeria.

His main excuse for attempting to experiment with West Africa's largest economy is cash management cost? Why then does he find it difficult to go back to the Soludo solution of redenomination and re-introduction of coins into the system? Pride? He should just swallow his pride joor and allow redenomination, as well as re-introduction of coins, in order to reduce the cost of printing, as well as the need for constant reprinting.

Large notes need not be phased out, and may be retained for large cash transactions.

Islamic banks, experimenting with Lagos' economy, this guy needs his head examined.

The man don Kolo patapata

For the sake of fighting corruption I support this IDEA 100%.All money transfer should be traceable.

Infact, personally I implemented this for my shopping, over 2 years Ago and It's working fine. Though the setback is that I am limited to only a few number of shops.

I'm beginning to appreciate this law a little bit. I would rather they test run the policy in the Abuja before going to lagos.

shaaggee:

It is no doubt a laudable scheme, but other critical infrastructure that would aid it have to be working seamlessly 1st. The telecoms & internet in this country are still in shambles as far as im concerned. Just a few days ago, i went somewhere and had a bill of about 3k. i didnt have enough cash and asked for their POS. They had about 5 and non of them were working! No network!!! i had to drive to the closest ATM, about 10 mins away to get cash. so i believe for this to work, power & telecoms have to get to a fairly reasonable working level.

I honestly believe that the implementation of this policy would encourage the IT sector to improve on their services. I also think it would expand the scope of the IT sector in Nigeria and it would also create thousands of jobs and job opportunities.
This is the best time to implement to this policy, if not when?

i am an expert in design and construction of Underfloor Safes,very realiable,contact me if u are interested!

A CBN governor who coughs out policies without critical assessment of its success factors is obviously not a good governor.Before it was Lagos, Aba, PH, Kano etc and now it's only lagos.Haba! Mr Governor, na so dem teach you?

I only hope this doesn't throw the Nigerian Economy into another round of recession.

we nigeria we have problem with the way we reason the man has come up with the best ideal for this country and you are saying is no capable let go cash less yes if we travel abroad we operate cash less so why do we prefer cash in this country when there are POS in various shop the ideal is good even if you need or want to get an item at the cost of 1000 niara the POS will do that so let stop giving useles excuses, o my God this country is sick God detrone bad Luck in the life of every nigeria so they think and reason well

the test run should be carried out in Abuja the capital, this so called C B N SHOULD no that it is only 1 million nigeria that have acess to internet

ALSO WATCH THE ACCOUNTS OF   TINUBU ,   BODE GEORGE  AND THEIR LIKES
NOT ALL THESE SMALL SMALL YAHOO YAHOO BOIZ

chamber2:

Lets not be in a haste to compare and conclude.A cashless economy is a good one and evolves gradually through proper and targeted enlightenment programs.Deploying the POS is not enough, ensuring that they are adequate and functioning continuously is also part of it.

You cant get a result if you don't carry out an experiment!

shaaggee:

It is no doubt a laudable scheme, but other critical infrastructure that would aid it have to be working seamlessly 1st. The telecoms & internet in this country are still in shambles as far as im concerned. Just a few days ago, i went somewhere and had a bill of about 3k. i didnt have enough cash and asked for their POS. They had about 5 and non of them were working! No network!!! i had to drive to the closest ATM, about 10 mins away to get cash. so i believe for this to work, power & telecoms have to get to a fairly reasonable working level.

yea shortage of ATM is still massive problem, i cant believe people have to go to a bank just to use an atm and most of them have only 2-3

chamber2:

A CBN governor who coughs out policies without critical assessment of its success factors is obviously not a good governor.Before it was Lagos, Aba, PH, Kano etc and now it's only lagos.Haba! Mr Governor, na so dem teach you?

I only hope this doesn't throw the Nigerian Economy into another round of recession.

how do you know this policy was coughed up with critical assessment, have you heard any bank come out to say they are against this? all the banks are on the board of the CBN making decisions together and this policy has been in the pipeline for a long time, if you are aware of the anti-money laundry bill
these are all part of the bill( 500k limit), you guys dont just read the papers and think policies just spring out from nowhere.

where did it say its only lagos?

felele:

I'm now convinced that Sanusi Lamido Sanusi has lost his marbles and does not deserve, on merit, to be the Governor of a primary school, talk less of the Central Bank of Nigeria.

His main excuse for attempting to experiment with West Africa's largest economy is cash management cost? Why then does he find it difficult to go back to the Soludo solution of redenomination and re-introduction of coins into the system? Pride? He should just swallow his pride joor and allow redenomination, as well as re-introduction of coins, in order to reduce the cost of printing, as well as the need for constant reprinting.

Large notes need not be phased out, and may be retained for large cash transactions.

Islamic banks, experimenting with Lagos' economy, this guy needs his head examined.

do you know what 200b could do? if you run an institution that spends 200b printing and moving cash around, you think thats okay when the same money can be channelled elsewhere?

re-introduction of coins? was coins ever banned?

Dis Guy:

You cant get a result if you don't carry out an experiment!

yea shortage of ATM is still massive problem, i cant believe people have to go to a bank just to use an atm and most of them have only 2-3

how do you know this policy was coughed up with critical assessment, have you heard any bank come out to say they are against this? all the banks are on the board of the CBN making decisions together and this policy has been in the pipeline for a long time, if you are aware of the anti-money laundry bill
these are all part of the bill( 500k limit), you guys dont just read the papers and think policies just spring out from nowhere.

where did it say its only lagos?

Fool. That means you are not current.

Evans5050:

Why are people so scared of change?
Only 8% will likely be affected by the policy, Hence will should learn or
inculcate the habit of using card
There is need for a cashless society.

When some people have CASH on them they feel RICH, think about it, when they go to a restaurant they only way they can show dem get money is spraying Naira notes, how do you oppress others with plastic card, cards don't make you pocket bulge  

scopusng:

Fool. That means you are not current.

pig, not current about what exactly?

how do you know this policy was coughed up with critical assessment, have you heard any bank come out to say they are against this? all the banks are on the board of the CBN making decisions together and this policy has been in the pipeline for a long time, if you are aware of the anti-money laundry bill
these are all part of the bill( 500k limit), you guys dont just read the papers and think policies just spring out from nowhere.

Of course they won't dare that.They are afraid of the CBN hammer.

Why do we people detest CHANGES which is inevitable like DEATH in life. Most people who have been privileged to travel know for sure that this is what is happening over in other countries. If we want to be there we have to start somewhere. It was said that statistics shows that only 8% of us using banks collect more than N150,000 per day. I believed that most of us on this forum or Nairalanders are not part of this 8%. Let this man Sanusi do this thing to help the economy to stop those in money laundering and let us TRUST ourself. Let there be capital punishment for dud cheque issuers to bring sanity to this policy. God bless Nigerians and Nairalanders.

Why do we people detest CHANGES which is inevitable like DEATH in life. Most people who have been privileged to travel know for sure that this is what is happening over in other countries. If we want to be there we have to start somewhere. It was said that statistics shows that only 8% of us using banks collect more than N150,000 per day. I believed that most of us on this forum or Nairalanders are not part of this 8%. Let this man Sanusi do this thing to help the economy to stop those in money laundering and let us TRUST ourself. Let there be capital punishment for dud cheque issuers to bring sanity to this policy. God bless Nigerians and Nairalanders.

Nobody is against change so to say, but it depends on the direction, nature and magnitude of change.In this case, the CBN has come out with a good policy but the nature of it implementation and time frame is obviously not suitable.

chamber2:

Of course they won't dare that.They are afraid of the CBN hammer.

what??  it is costing THEM money moving cash around! They invested massively in chams and interswitch, invested massively into cards signing up with mastercard,visa etc invested heavily in IT,

I mean why will any sane business do this if they are not aligning themselves for the obvious? And tehy have been doing all these way before the announcement of this policy because it has been in the pipeline only that there was no one taking the bull by the horn to fix a date!

what??  it is costing THEM money moving cash around! They invested massively in chams and interswitch, invested massively into cards signing up with mastercard,visa etc invested heavily in IT,

I mean why will any sane business do this if they are not aligning themselves for the obvious? And tehy have been doing all these way before the announcement of this policy because it has been in the pipeline only that there was no one taking the bull by the horn to fix a date!

You seem not to understand people's concern.The policy is good but the way and manner the CBN is going about it is not healthy.

where did it say its only lagos?

''CBN governor, Malam Sanusi Lamido Sanusi, said in Abuja on Tuesday that the bank would test-run its cash transaction limit policy in Lagos in the next six months.''

it is really puzzling for people to see a cashless economy in this day and age as a bad idea. apart from the obvious advantage of cutting the rate of armed robbery it will also serve to reduce the rate of bank fraud, so if your atm or your bank account is compromised there is a ceiling to the daily withdrawal before you discover and put a stop to it as opposed to the situation where millions of naira is withdrawn in a matter of days.
it will help for a smoother business transaction cause now i can transact so many businesses at the swipe of a card .
even though the interests and the charges the banks make at he momenare outrageous,compared to the peace of mind it is a price worth it,but i believe 300,00 as a daily limit or up to 500,000 for selected few depending on the amount in the account and the usage,purpose,business e.t.c
a company account or a multi millionaire/billionaire might need a daily withdrawal well over 150000 but a run of the mill bank account 150-200k