Governor of the Central Bank of Nigeria, Godwin Emefiele said on Friday that the new drive in implementing the cashless policy which now requires bank customers to pay some charges on both deposits and withdrawals would help Nigeria wriggle out of the Anti-money laundering and Counter-Financing of Terrorism (CFT) test coming soon.
The assessment would be conducted by the Inter-Governmental Action Group against Money Laundering in West Africa(GIABA) – a specialised institution of the Economic Community of West African Statesresponsible for facilitating the adoption and implementation of Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) in West Africa.
Consisting of 17 member states, and headquartered in Dakar, Senegal, GIABA is also the FATFStyle Regional Body (FSRB) in West Africa and works with states in the region to ensure compliance with international AML/CFT standards.
Addressing the press on the outcomes of the two days Monetary Policy Commitee Meeting in Abuja, Godwin Emefiele said the body would be in the country the new to aggressively implement the cashless policy comes at a strategic timing for this action because on Monday, September 23, the mutual evaluation of Nigeria by GIABA on countries and money laundering and CFT regime will begin.
“Passing the mutual evaluation positions, and for Nigeria to be appraised as a safe and credible destination for financial transaction across the world is crucial,” Emefiele stated.
According to him, “GIABA will be in Nigeria on 23rd September to evaluate the rate at which Nigeria has embraces anti money laundering and CFT regime, it is important that w display and show to them that Nigeria is indeed in conformity with their practices as in their anti money laundering and CFT laws.
“What this means also is that if we do no do what we are doing today, we will soon get to a point where if they pass us negative, even your cards that you carry abroad, you may not be able to use them.
“So it is in our own best interest that we should be seen to be working in line with best global practices so that we can have a comfortable and convenient life in future.”
The CBN announced last Tuesday it would begin an aggression implementation of its cashless policy, which signaled the imposition of charges on deposits in addition to already existing charges on withdrawals.
The policy which took effect last Wednesday attracted 3% per cent processing fees for withdrawals and two per cent processing fees for lodgments of amounts above N500, 000 for individual accounts and 5% processing fees for withdrawals and three per cent processing fee for lodgments of amounts above N3, 000, 000.
The charge on deposits only apply in Lagos, Ogun, Kano, Abia, Anambra, and Rivers States as well as the Federal Capital Territory till the nationwide implementation of the cashless policy from March 31, 2020.
Emefiele, while empathizing with the Nigerian banking public following wide concerns raised on the new policy, the Governor assured that the Cashless policy would also improve transparency in financial dealing and reduction in crime such as advancing fraud, graft, ransome payments and extortion.
He said the cashless policy is in line with the CBN quest to adopt international best practices and international conventions especially in view of the recent reputationaldamage with some Nigerians perpetuating advance free fraud that we think that Nigeria must proceed in the direction of cashless economy.
The central bank of Nigeria mandate and responsibility under the CBN act of 2007 amended, which empowers it to promote a sound and stable financial system and credible efficient payment system and im talking of section 2d and section 47 of the CBN act,
Besides, Emefiele recalled that the cashless policy in Nigeria is not new, having been initiated by his predecessor- but that following several engagements with multiple stakeholders, the policy was suspended to allow the country fully embrace electronic payment before implementation.
“After some engagements with some stakeholders in 2014, we agreed that it was too early to charge people who want to deposit money in the bank because there were a lot of cash put side the bank industry and there was no need to penalize people who would like to bring their cash from outside the banking industry in to the bank industry that we should relax the essence of charging p[people for depositing money in the bank.
“We expect that over 5 years all the cash that would have been kept under people’s mattresses and pillow by 5 years we should have been able to bring them back into the banking industry and that we say by this time we would like to return back to them. so what we are saying today is not new.
The governor also said the cashless policy would help in the apex bank’s cash management, regretting that following the withdrawal of the policy of deposit charge in 2014, through to 2018, currency management cost have continued to increase year on year at an annual average growth rate of 33 percent.
“That is actually too high, not withstanding, since the cashless policy was first launched, electronic transactions have increased i the economy.
Reeling out figures which suggest the banking public is now ripe for the cashless policy, Emefiele noted that POS transactions have increased by 4,692 percent, translating to levels of from just N48.6 billion in 2012 to N2.3 trillion at the end of 2018, second.
Also, electronic transfer increased significantly by 1,967 percent N76.5 trillion from N3.8 trillion in 2012 to N80.42 trillion in 2018, while cheque transactions reduced by 32 percent by N2.54 billion from N7.48 billion in 2012 to N5.03 billion in 2018.
Financial access points, ATM, POS, agents and mobile cash across each cashless policy states have also witnessed exponential growth.
“so what we are saying is that we have provided alternative channels and people have indeed embraced it,” he said, noting another data which show close to 95 percent of cash deposited or withdrawn from banks fall below the N500,000 threshold targeted by the cashless policy.
“so only about 5 or maximum 10 percent of people are those complaining that this is going to weaken and they know what this purpose is for.”
The governor further explained that Financial inclusion has also recorded significant improvement in Nigeria.
Quoting EFiNA figures, Emefiele explained that financial inclusion has increased to 65 percent from just 40 percent in just 18 months ago, while inclusion rate in cashless policy states are in line or above the national average; for in stance in Lagos where inclusion is about 85 percent; Abia, 74 percent; and FCT 68 percent.
“The other states are having low financial inclusion rate and there is a need for us to deepen financial inclusion and to do so also means that we have provided enough channels and we can begin to go cashless.”
“The CBN encourages Nigerians to recognize the significant strides made so far in financial inclusion, improvement in the number and variety of financial access points and proliferation of digital and online payment channel will naturally help our situation,” Emefiele assured.
Onyinye Nwachukwu, Abuja
