The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1958.
The major regulatory objectives of the bank as stated in the CBN act of 1958 is to: maintain the external reserves of the country, promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government.
We write to inform you of the modalities on the Central Bank of Nigeria’s (CBN) cash-less policy that commenced in Lagos on April 1, 2012 and July 1, 2013 in the Federal Capital Territory (Abuja), Abia, Anambra, Kano, Ogun and Rivers States.
|Map of the Federal Republic of Nigeria|
What is the aim of this policy?
The cash-less policy aims at reducing the amount of physical cash circulating in the economy and encouraging more electronic-based transactions (payments for goods, services, transfers, etc.).
This policy will drive development and modernization of the country's payment system within these States as all individuals and corporates will be encouraged to adopt electronic payment and banking options.
Operational modalities across the states
The following modalities which are currently operational in Lagos State will also be applicable in the newly introduced States*:
- The cash-in-transit lodgment and cash evacuation services will no longer be available to customers or merchants.
- For individual account holders, charges will apply when daily cumulative withdrawals and deposits are in excess of N500,000
- For corporate account holders, charges will apply when daily cumulative withdrawals and deposits are in excess of N3,000,000
- The Cashless policy applies to all accounts including COLLECTION accounts i.e. all sub-accounts linked to the same account holder would be treated as one account for both corporate and individual accounts.
|Individual||2% on excess||3% on excess|
|Corporate||3% on excess||5% on excess|
*However, charges have been deferred in the newly introduced states till October 1st, 2013.
Kindly note that the above limits apply so far as it involves cash, irrespective of channel i.e over the counter, ATM, 3rd party cheques cashed over the counter etc. For example, if an individual withdraws N450,000 over the counter, and N150,000 from the ATM on the same day, the total amount withdrawn by the customer is N600,000, and the service charge will apply on N100,000 - the amount above the daily free limit of N500,000.
Exemptions to modalities under operation
Exemptions have however been granted on lodgments and withdrawals for accounts operated by Embassies, Diplomatic Missions, Multilateral Agencies, Aid Donor Agencies, Ministries, Departments and Agencies of Government (revenue collections only), Microfinance Banks (MFBs) and Primary Mortgage Institutions (PMIs).
What you should do
To ensure a seamless transition to a cashless economy, banks have made several safe and convenient alternative channels available to the general public for personal and business banking. These channels include mobile money, internet banking, telephone banking, POS, ATM, cards, social banking, etc etc.
You may do well to begin preparing your mind first, and taking concrete steps, toward accepting and ensuring a seamless transition into the cash-less society that must come, whatever our views.
Contact your bank for detailed information on the many electronic channels available to you.