Wednesday, 08 June 2011

THE Central Bank of Nigeria (CBN) has disclosed that its cash withdrawal limit policy will kick off in Lagos State by December 2011.

This is as it stressed that rescued banks needed N1.5 trillion private fund to operate as a going concern.

Rising from the 304th Bankers’ Committee meeting in Abuja, the Director, Banking Supervision, CBN, Mr Samuel Oni, told newsmen that before the June 2012 kick-off date for the cashless economy policy, the apex bank would commence the policy earlier in Lagos.

He said the CBN would flood the state with Point of Sales (POS) terminals, along with the deployment of about 40,000 Automatic Teller Machines (ATMs) by December.

By June 2012, he said the number would have increased to 75,000 and by December 2012, it would be further increased to 150,000.

Oni said by December 2015, Nigeria would have attained 275,000 ATMs per 100,000 persons, while assuring that the process of transition would be seamless.

According to him, the idea was to replicate what obtained in other parts of the world in Nigeria.
He said the banks had decided to collaborate with the telecoms operators to increase their bandwidth, so as to be able to accommodate the volume of transactions.

On how the CBN arrived at the N150,000 limit, he said through survey, over 90 per cent cash transaction that took place in Nigeria was below N150,000.

“We think that this policy will accommodate everybody. This is the world best practice and we should not be left behind,” he said.

Oni also noted that the cash economy was costly, as the cost of transportation, security and printing would cost Nigeria N200 billion annually.

The CBN director disclosed that the resued banks needed N1.5 trillion private fund to keep afloat, while warning shareholders against stalling the process of merger and acquisition Oni warned the shareholders against stalling privatisation in the rescued banks, adding that technically, the shareholders were not the owners of the banks.

While insisting that CBN was resolute in recapitalising the banks, said already three memoranda of understanding (MoU) had been signed with the banks.

The director noted that the banks were in critical condition before CBN injected N620 billion lifeline and that in the event that the money is withdrawn, the banks would go back to their former state.

To this effect, Oni warned the shareholders to desist from their planned action as the apex bank has other options to deal with the issue.

He reminded the shareholders that the objective of CBN is to ensure financial system stability and that is not negotiable, adding that customers have no need to be afraid as their interests have been taken into consideration.

He said “We want to assure customers that they must be protected. If shareholders have any issues, they should find a better way to do that. These banks are existing because of the money we injected.
Those banks that will be recapitalized need N1.5 trillion. We make an appeal to those shareholders that are stalling the process to rethink because CBN has other options.

http://tribune.com.ng/index.php/news/23195-cash-withdrawal-policy-to-start-with-lagos-dec--cbn