Nigeria’s financial inclusion is at risk, while deposit money banks stand to make huge profits from charges on cash deposits and withdrawal which commenced yesterday as directed by the Central Bank of Nigeria (CBN) on Tuesday.
Tax collectors, supermarkets and retailers who deposit and withdraw large sum of cash would also be affected by the new rule on bank charges.
The CBN on Tuesday issued a circular on commencement of charges on deposits in addition to already existing charges on withdrawals.
Consequently, customers are to pay huge fees for cash deposit or withdrawal above N500,000 for individual account and N3 million for corporate account.
Uju Ogubunka, president, Banks Customers Association of Nigeria (BCAN), said banks’ bottom-line will increase as they now have another source of income.
“They will be making income and killing their customers because some customers will back out and the banks’ deposit base will drop,” Ogubunka said.
He sees the CBN’s new rule on bank charges as going against cashless drive of the government as customers may look for elsewhere to lodge their money, saying this would not encourage financial inclusion.
Godwin Emefiele, governor of the CBN, said in his five-year policy thrust that the ultimate objective of the apex bank was to ensure that 95 percent of eligible Nigerians have access to financial services by 2024.
The 2018 Financial Inclusion Survey by Enhancing Financial Innovation and Access (EFInA) revealed that financial inclusion rate increased to 63.6 percent in 2018 from 45.4 percent recorded in 2016.
The circular to deposit money banks signed by Sam Okojere, director, payment system management department of the CBN, said the nationwide implementation of cashless policy will take effect from March 31, 2020.
The statement said the charge on deposits would apply in Lagos, Ogun, Kano, Abia, Anambra, and Rivers States as well as the Federal Capital Territory.
Taiwo Oyedele, head of tax at PwC, said the policy would affect supermarkets and retailers with a lot of cash takings, and even tax collectors who collect taxes in cash.
He said via Twitter that without careful implementation with relevant exemptions, the policy would negatively affect financial inclusion and further complicate ease of doing business for small businesses.
Ayodele Akinwunmi of FSDH Merchant Bank Limited said the development would help to reduce cash handling and increase the cash retention within the financial system.
“It will also increase the adoption of electronic banking which will accelerate financial inclusion,” Akinwunmi said.
The selected banking sector report for the first quarter of 2019 by the National Bureau of Statistics (NBS) shows that 557,083,712 transactions valued at N34.02 trillion were recorded in the Electronic Payment Channels.
To further promote a cash-less economy and enhance the collection of applicable government revenues, the CBN on Tuesday announced a review of the process for merchant settlement.
With effect from September 17, 2019, the CBN approved for banks to unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulations.
Hope Moses-Ashike
