11 communities sue CBN over daily withdrawal limit
On June 13, 2011 · In News

By Ikechukwu Nnochiri
ABUJA — Eleven communities in the riverine areas of Delta State have asked a Federal High Court in Abuja to declare the directive issued by the Governor of the Central Bank of Nigeria, CBN, Mallam Sanusi Lamido, to all financial institutions in Nigeria, limiting cash withdrawal by individuals and corporate bodies to N150,000.00 and N1,000,000.00 respectively, as null and void.


Sanusi Lamido
The plaintiffs are specifically praying the High Court for an order of perpetual injunction, restraining the CBN and its governor, from implementing such policy, pending the hearing and determination of their substantive suit.

The communities behind the suit are Akpakpa, Ogidigben, Madagho, Ijalla, Kantu, Omadino, Ogheye, Dheghe, Ajudaibo, Obaghoro and Okrigho.

The plaintiffs who contended that going ahead with such plan would amount to an infringement on their fundamental rights as enshrined in the 1999 constitution as amended, equally joined the Office of the Attorney-General of the Federation as a defendant in the suit.

Among other reliefs they are seeking from the court includes, “a declaration that the policy/directive issued by the 1st and 2nd respondents to all financial institutions in Nigeria to charge a punitive fine of N100.00 for every N1,000.00 withdrawn from such financial institution, is excessive, punitive, derogatory and a breach of the fundamental rights of the applicant under the constitution of the Federal Republic of Nigeria as amended 1999 and is null and void.

As well as, “an order of perpetual injunction restraining all the respondents whether by themselves, their servants, agents, privies or other representatives, howsoever called, from implementing the policy/directive limiting cash withdrawal by individuals and corporate bodies to N150,000.00 and N1,000,000.00 respectively.”

Canvassing their arguments through an affidavit deposed to by a leader of one of the communities, Mr. Ayiri Emami, the plaintiffs maintained that implementing the directive would cause them severe economic hardship.

Emami averred that more than 50 per cent of workers under his employ in the community earn their wages on daily basis whilst the rest earn monthly salary, adding that he pays over N1,500,000.00 to workers on daily basis, except on Sundays.

He argued that the proceeds from all his businesses, which he deposited with various financial institutions within the state, are his property, insisting that he should statutorily have the exclusive right to determine the volume of withdrawal to make at any point in time.

If Kidnappers snatch someone's mum, and demand N5M cash, how will he/she pay (if s/he has)?
That will be about 34 days of consistent withdrawal of N150k daily.

^ ^ ^
Are you a kidnapper?   
Has the CBN ruined your business blueprint   

Nigeria to used as prototype for the government of anti-Christ? 666 will use money to control man and without that number you will not be able to buy and sell,

Anyway just accept Christ and be rapture so as to be free

otitokoro1:

Nigeria to used as prototype for the government of anti-Christ? 666 will use money to control man and without that number you will not be able to buy and sell,

Anyway just accept Christ and be rapture so as to be free

bros wetin you drink?



is delta part of the test phase?
All these people disrupting judges sef

opalu:

If Kidnappers snatch someone's mum, and demand N5M cash, how will he/she pay (if s/he has)?
That will be about 34 days of consistent withdrawal of N150k daily.

Dude, try to be logical. Why should kidnappers care if you take 10% of money they didn't really work for? They'll just pass the cost to the victim, of course. The rule has little or no effect on criminals but it has a big effect on traders who worked for their cash and have to make a profit on it to survive. If you take 10% of my daily turnover as a trader, then how can I possibly make profit after paying my bills? It's a silly policy.

Honestly, this 150k max withdrawal/deposit is pretty dumb!

There are ways of reducing cash usage without resorting to such an insensitive sanction. Common sense dictates that if your want to stop people from doing something, make it uncomfortable for them to do it!

When they were pumping 500 and 1,000 Naira notes into the system they didn't think what it would do to cash usage.

IF they want to discourage people from using cash, they should simply reduce the amount of any note higher that N50 from circulation.

By the time you go to the bank to withdraw 100k and get a ghana-must-go of cash, no be person go tell you make you find alternative!

But then as Nigerians, we love to complicate things!

Nigeria to used as prototype for the government of anti-Christ? 666 will use money to control man and without that number you will not be able to buy and sell,

Anyway just accept Christ and be rapture so as to be free

ARE U A PROPHET?
THAT PLAN HAS BEEN ON GROUND THAT IS WHY THEY WANT TO REMOVE ANY DETECTOR THAT WILL OPPOSE THEM

opalu:

If Kidnappers snatch someone's mum, and demand N5M cash, how will he/she pay (if s/he has)?
That will be about 34 days of consistent withdrawal of N150k daily.

infact the upper limit should be further reduced to N50K. If anything to stem the tide of kidnapping.

Ujujoan:

Honestly, this 150k max withdrawal/deposit is pretty dumb!

There are ways of reducing cash usage without resorting to such an insensitive sanction. Common sense dictates that if your want to stop people from doing something, make it uncomfortable for them to do it!

When they were pumping 500 and 1,000 Naira notes into the system they didn't think what it would do to cash usage.

IF they want to discourage people from using cash, they should simply reduce the amount of any note higher that N50 from circulation.

By the time you go to the bank to withdraw 100k and get a ghana-must-go of cash, no be person go tell you make you find alternative!  

But then as Nigerians, we love to complicate things!  

I agree with you on the policy, but I think you got the solution backwards.  Sanusi/CBN are not trying to push Nigerians towards a cashless economy; that's just a random justification added after the fact. They are trying to reduce the cost of managing cash, i.e. the cost of replacing worn out naira notes.  The CBN constantly has to replace naira notes when they get worn out, and it costs a lot.

To achieve that, they can push towards higher denomination notes.  For example, if N10,000 notes are available, and I want to withdraw 150k, that will be just 15 notes.  In 200 naira notes, that will be 750 notes.  The cost of replacing those 750 N200 notes when they get worn out is 50 times the cost of replacing 15 N10000 notes, so it's going to be cheaper to make higher denomination notes available for large transactions.

Instead of doing that, the CBN would rather impose hardship on traders because they refuse to understand that the inconvenience this will cause to traders all over the country (and their customers, i.e. all of us) is a cost too.  It's not a financial cost, but it's a huge economic cost.  They need to understand that financial costs are not the only costs to be considered.  You cannot create value by stifling markets.

I support d delta ppl. Imagine,how can somebody tel me how u spend my cash.cashless economy r for advanced countries with advanced technology. Ask sanusi if he knows what wifi is.retardard junkie.lol

Seun:

I agree with you on the policy, but I think you got the solution backwards.  Sanusi/CBN are not trying to push Nigerians towards a cashless economy; that's just a random justification added after the fact. They are trying to reduce the cost of managing cash, i.e. the cost of replacing worn out naira notes.  The CBN constantly has to replace naira notes when they get worn out, and it costs a lot.

To achieve that, they can push towards higher denomination notes.  For example, if N10,000 notes are available, and I want to withdraw 150k, that will be just 15 notes.  In 200 naira notes, that will be 750 notes.  The cost of replacing those 750 N200 notes when they get worn out is 50 times the cost of replacing 15 N10000 notes, so it's going to be cheaper to make higher denomination notes available for large transactions.

Instead of doing that, the CBN would rather impose hardship on traders because they refuse to understand that the inconvenience this will cause to traders all over the country (and their customers, i.e. all of us) is a cost too.  It's not a financial cost, but it's a huge economic cost.  They need to understand that financial costs are not the only costs to be considered.  You cannot create value by stifling markets.

I think Sanusi was going for multi-objective policy . . . .    

Personally, I will prefer adoption of coin usage and reducing the value of one note . . . .  to your suggestion!

Producing higher denomination notes will only lead to inflation . . .  Ideally, a country shouldn't have more than 500 of it's currency in one note. Knowing how Nigerians abuse money, a bigger denomination will automatically reduce the demand for the lower denominations.

N20 downwards should be coins and we'll just have 50,100 and 150 (0r 200) naira notes!

This will kill two birds with one stone . . .  Discourage people from carrying cash and reduce the cost of maintaining cash in circulation. No matter how much you look at it, these 'traders' you keep fighting for will rather deal with cheques than huge quantity of cash.

If we have a stable cheque guarantee system, I'm sure we'll be fine.

Anyone issuing a dud cheque should know that it automatically translates into an overdraft on his/her account . . .  I think less people will do that!    

Anyone issuing a dud cheque should know that it automatically translates into an overdraft on his/her account . . . I think less people will do that!

Nice idea

Electronic transactions help with records and fraud and money laundering can be detected better than cash

Fiver:

Nice idea

Electronic transactions help with records and fraud and money laundering can be detected better than cash

True . . .

Fiver:

Nice idea

Electronic transactions help with records and fraud and money laundering can be detected better than cash

Exactly, this policy will bring about a much easier way of tracking money in organisations.

I remember when mama Cass deployed an automated till system. Their sales doubled simply because cashiers were no longer able to steal cash as every transaction was being recorded.

The same should apply to all other sectors, to a certain extent one could argue that the infrastrcuture is not available but being Nigerians if the this sort of policy was to come into play everybody would adjust which would result in electronic funds transfer growing in the country, opening doors for so many businesses (old and new)

Ujujoan:

True . . .

Don't want to ruffle a few feathers but when you take note of the sectors most in opposition I want to bet that a good proportion are probably involved in this money laundering business within and across borders. I will not mention businesses.

Are we really ready for this? Recently Sony, Google, CityBank and IMF (yes IMF!!!) were hit by cyber hackers! Can Sanusi really assure us of the security of our systems? Anyway, that is another subject.

As Seun rightly said, the main reason behind the policy is the cost of managing cash and not even e-banking. Sanusi has got it all wrong simply because he does not want to do what Soludo did or tried to do I.e (The coin, N1,000 note and removing the 2 zeros options). He also does not want to take a more sustainable but difficult option of gradual development. He wants a military style implementation that will profit CBN even if Nigerians refuse to change.

We have already dealt with this subject extensively in other threads but I think the summary was to make the e-payment options more attractive and secure while allowing those who want to continue with cash to do so. We also said the necessary infrastructure has to be in place for an aggressive implementation to be effective.

Reference:

Don't want to ruffle a few feathers but when you take note of the sectors most in opposition I want to bet that a good proportion are probably involved in this money laundering business within and across borders. I will not mention businesses.

Those involved in laundering money are the least to be bothered here . . . afterall they are only losing a little of the 'stolen' money!

Like every other policy in Nigeria, it's the poor who will eventually suffer!

I don't mind a cashless society, but we need to put the right structure in place for it to be successful.

efisher:

Are we really ready for this? Recently Sony, Google, CityBank and IMF (yes IMF!!!) were hit by cyber hackers! Can Sanusi really assure us of the security of our systems? Anyway, that is another subject.

As Seun rightly said, the main reason behind the policy is the cost of managing cash and not even e-banking. Sanusi has got it all wrong simply because he does not want to do what Soludo did or tried to do I.e (The coin, N1,000 note and removing the 2 zeros options). He also does not want to take a more sustainable but difficult option of gradual development. He wants a military style implementation that will profit CBN even if Nigerians refuse to change.

We have already dealt with this subject extensively in other threads but I think the summary was to make the e-payment options more attractive and secure while allowing those who want to continue with cash to do so. We also said the necessary infrastructure has to be in place for an aggressive implementation to be effective.

While the e-payment option is good, I really think we should exhaust the cheque system first before relying solely on e-payment.

Nigeria completely jumped from cash to plastic . . . the cheque option has not been properly utilized.

If cheques are used as alternatives, we might be able to reduce the system overload which will definitely happen if there an 80% reliance on e-payment!

efisher:

Are we really ready for this? Recently Sony, Google, CityBank and IMF (yes IMF!!!) were hit by cyber hackers! Can Sanusi really assure us of the security of our systems? Anyway, that is another subject.

As Seun rightly said, the main reason behind the policy is the cost of managing cash and not even e-banking. Sanusi has got it all wrong simply because he does not want to do what Soludo did or tried to do I.e (The coin, N1,000 note and removing the 2 zeros options). He also does not want to take a more sustainable but difficult option of gradual development. He wants a military style implementation that will profit CBN even if Nigerians refuse to change.

We have already dealt with this subject extensively in other threads but I think the summary was to make the e-payment options more attractive and secure while allowing those who want to continue with cash to do so. We also said the necessary infrastructure has to be in place for an aggressive implementation to be effective.

if we are waiting for e-payment to be 100% secure before we introduce electronic payment then we will wait forever, the profit wont be for CBN alone, security is a big plus to everybody

@Fiver, I agree we do not need to wait for it to be 100% secure before using e-payment but we need to make OUR own systems (in Nigeria) as secure as possible before forcing Nigerians into it. I currently make most of my transactions online but it is best as an option until we are able to manage the threats. We do not want to wake up one morning to find out that 90% of our nation's money has ended up in China! As I said earlier, that is another subject. Sanusi's motive is not even getting everyone to embrace e-payment but to reduce the cost of managing cash.

How can sanusi adopt this senseless policy in a country where most of the businessmen are computer novice? No problem, we'll explore the option banking in containers or under the soil.

efisher:

@Fiver, I agree we do not need to wait for it to be 100% secure before using e-payment but we need to make OUR own systems (in Nigeria) as secure as possible before forcing Nigerians into it. I currently make most of my transactions online but it is best as an option until we are able to manage the threats. We do not want to wake up one morning to find out that 90% of our nation's money has ended up in China! As I said earlier, that is another subject. Sanusi's motive is not even getting everyone to embrace e-payment but to reduce the cost of managing cash.

sorry but the FSS 2020 was drawn up before Sanusi became the CBN manager, the move towards e-payment was contained in there, the cost of managing cash is just one of the benefits

kasiem:

How can sanusi adopt this senseless policy in a country where most of the businessmen are computer novice? No problem, we'll explore the option banking in containers or under the soil.

Most business man use 1-4 phones, epayment is not all about internet banking

Seun:

I agree with you on the policy, but I think you got the solution backwards. Sanusi/CBN are not trying to push Nigerians towards a cashless economy; that's just a random justification added after the fact. They are trying to reduce the cost of managing cash, i.e. the cost of replacing worn out naira notes. The CBN constantly has to replace naira notes when they get worn out, and it costs a lot.

To achieve that, they can push towards higher denomination notes. For example, if N10,000 notes are available, and I want to withdraw 150k, that will be just 15 notes. In 200 naira notes, that will be 750 notes. The cost of replacing those 750 N200 notes when they get worn out is 50 times the cost of replacing 15 N10000 notes, so it's going to be cheaper to make higher denomination notes available for large transactions.

Instead of doing that, the CBN would rather impose hardship on traders because they refuse to understand that the inconvenience this will cause to traders all over the country (and their customers, i.e. all of us) is a cost too. It's not a financial cost, but it's a huge economic cost. They need to understand that financial costs are not the only costs to be considered. You cannot create value by stifling markets.

Oga Seun, I beg to differ on this point I've embolden.
You actually gave a punchline that doesn't fit into your flow of logic. The intent of this policy is to reduce drastically the cost of replacing and eliminating Naira bills as you said. However, by placing the withdrawal jamlock, the poor WON'T be at the receiving end because obviously, they are not 'supposed' to make withdrawal in excess of N150K (if at all they are low-income Earners/Traders).
Those whose business transactions exceed the N150k mark daily should be the ones to complain. Atleast from the Research dept of the CBN, they carried out an extensive research that revealed that an overwhelming percentage of Nigerians don't make daily withdrawals above N150k.

I personally hate cash. It is too risky and too discomforting. Why must u trekk to an ATM in a corner to withdraw say N150K or more? Why not just e-send it to wherever u need it to be?

in the the so called advanced world people use cash less not because of rules,policies or laws but because there are real alternatives that work.

imagine building a house of 12 million naira how easy is it to pay for sand cement rods etc electronically.

with no electricity how can payments be made in real time and confirmed without risk to seller.

you don't need to make laws for people to adopt good tehnology.

no laws were made before people started dumping VHS for DVDs.

most annoying about this ruling is the lack of consultation with immediate effect approach that appears typical of this mallam

aribisala0:

in the the so called advanced world people use cash less not because of rules,policies or laws but because there are real alternatives that work.

You got it right.

That is the right strategy for a sustainable approach. Sanusi is only looking for a quick fix which will benefit CBN any way it goes. He knows many people may still not go with e-payment and has therefore planned to transfer the cost to them (even if there is no infrastructure). Either way, CBN profits from the plan. He is just being too lazy to go through the development of a reliable system.

ultimately

opalu:

If Kidnappers snatch someone's mum, and demand N5M cash, how will he/she pay (if s/he has)?
That will be about 34 days of consistent withdrawal of N150k daily.

It should even be brought lower then. Maybe even 15000.00


Are electronic transactions also included in this? I am wondering why someone would need to withdraw a million naira in cash

ultimately bank notes like VHS is a technology that will become obsolete. these things happen naturally. who buys vinyl records these days?  

my uncle JOE

if you are wondering either you live in a bubble or you are being obtuse.

even in the US $6000 cash is no big deal

in nigeria if you are buying goods to take away who is going to accept anything other than cash go to the cattle,tomato,or any other market and offer them cheques.

in fact your question e vex me no be small