Cashless Policy to eradicate fraudulent activities in banking system -Emefiele

…as MPC retains MPR at 13.5%

By Etuka Sunday

The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele has said that the introduction of the Cashless Policy was to eradicate fraudulent activities in the banking system.
He clarified, that the policy was not meant to punish Nigerians, especially business owners as being speculated.
Recall, CBN, in a circular to all deposit money bank (DMBs), dated September 17, 2019 announced the commencement of charges on deposits in addition to already existing charges on withdrawals.
According to the circular, the charges, which took effect from Wednesday, September 18, 2019, will attract 3% processing fees for withdrawals and 2% processing fees for lodgments of amounts above N500,000 for individual accounts.
Similarly, corporate accounts will attract 5% processing fees for withdrawals and 3% processing fee for lodgments of amounts above N3,000,000.
It said, the charge on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, and Rivers States as well as the Federal Capital Territory.
It added that the implementation of the cash-less policy would take effect from March 31, 2020.
The apex bank governor, while addressing newsmen shortly after the Monetary Policy Committee (MPC) meeting in Abuja on Friday, said, the policy was not a new initiative, saying that it was launched in 2012.
He explained that the policy was not fully implemented because there was a lot of cash outside the banking industry when it was launched.
“Because there was lots of cash outside the banking industry we decided that there was no need to penalise those that wanted to bring in their cash from outside the banking industry into the banking industry, therefore, we retained the charges on withdrawals and relax charges on deposit.
“After five years, we expect that all the cash that was outside the banking system has been returned. So we think it is time to fully kick start the cashless policy,” he said.
The CBN boss said, the implementation of the new Value Added Tax (VAT) is a government strategy of raising revenue to meet its obligations which includes the provision of good roads and proper electrification in the country.
Meanwhile, for the MPC, he announced that the Committee decided by a unanimous vote to retain the Monetary Policy Rate (MPR) at 13.5 per cent and to hold all other policy parameters constant.
He said, “the MPC voted to: Retain the MPR at 13.5 per cent; Retain the asymmetric corridor of +200/-500 basis points around the MPR; Retain the CRR at 22.5 per cent; and Retain the Liquidity Ratio at 30 per cent.”
He said, the Committee noted the positive moderation in inflation, though slowly from 11.08 per cent in July to 11.02 per cent in August 2019.
“Given that this was still above the target range of 6-9 per cent, and considering the pressure on reserve accretion caused by the relatively weak crude oil price, the MPC felt the imperative to tighten,” he said.