Welcome, Guest: Register On Nairaland / LOGIN! / Trending / Recent / New
Stats: 3,143,491 members, 7,781,474 topics. Date: Friday, 29 March 2024 at 03:03 PM

CBN Imposes Limits, Penalty On Cash Transactions, Again! - Business - Nairaland

Nairaland Forum / Nairaland / General / Business / CBN Imposes Limits, Penalty On Cash Transactions, Again! (25302 Views)

Poll: How do you feel about this?

it's a dumb idea: 74% (218 votes)
it's a smart idea: 25% (75 votes)
This poll has ended

Know The States That Controls 90% Cash Transactions in Nigeria-cbn / CBN Reintroduces N65 Charges On Cash Withdrawals On ‘other Banks’ Atms / Sanusi (CBN) Imposes Limits, Penalty On Cash Transactions (2) (3) (4)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) ... (12) (Reply) (Go Down)

CBN Imposes Limits, Penalty On Cash Transactions, Again! by egift(m): 10:03am On Apr 29, 2011
….N150,000 for individuals; N200,000 for corporate organisations

By Babajide Komolafe

From June 2012, individuals that make cash withdrawal or deposit above N150,000 would pay a fine of N100 per extra N1,000, while corporate organisations that make cash withdrawal or deposit above N1 million would pay fine of N200 per extra N1,000.

These limits for free cash withdrawal and deposits were part of a new policy aimed at reducing the high usage of cash in the economy announced by the Central Bank of Nigeria, CBN, yesterday.

The policy, which would be enforced in Lagos State, Abuja, Port Harcourt, Kano and Aba in the first instance also banned encashment of third party cheques above N150,000 across the counter

The policy was contained in a circular signed by Mr Muhammad Nda, Director, Currency Operations Department  and addressed to all banks, Cash In Transit (CIT) companies and electronic payment providers.

The circular entitled: “Industry policy on retail cash collection and lodgement” stated: “In view of increasing dominance of cash in the economy with its implication for cost of cash management to the banking industry, security, money laundering, etc., the Central Bank of Nigeria, in collaboration with the Bankers Committee, is adopting policies to reduce the high usage of cash, moderate the cost of cash management and encourage the use of electronic payment channels. Consequently, the Central Bank of Nigeria hereby directs as follows:

The limits

“Commencing from June 1, 2012, a daily cumulative limit of N150,000 and N1,000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively with Deposit Money Banks (DMBs) shall be imposed. To this end, individuals and corporate organisations that make cash transactions above the limits  will be charged a penal fee of N100/thousand and N200/thousand respectively for amounts above the cumulative limits.

“Contravention of this policy shall attract a fine of five (5) times the amount that the bank waives as a first offender. Subsequently, the bank shall pay ten (10) times the charges waived.

“Furthermore, 3rd party cheques above N150,000 shall not be eligible for encashment over the counter. Value for such cheques shall be received through the clearing house.

Penalties

“If a bank allows 3rd party cheque encashment, it shall be liable to a sanction of 10% of the face value of the cheque or N100,000 whichever is higher.

“Banks will cease cash in transit lodgment services rendered to merchant_customers from June 1, 2012. In this regard, customers could engage the services of the CBN licensed cash-in-transit (CIT) companies to aid cash movement to and from their banks at mutually agreed terms and conditions.  Contravention of this policy shall attract a fine of N1.0 million per specie movement.

“This arrangement shall be in force in Lagos State, FCT, Port Harcourt, Kano and Aba in the first instance. The arrangement shall be extended to other parts of the country at a date to be determined by the Bankers Committee.”

“To achieve interoperability of local currency POS transactions, no  card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria with effect from June 1, 2011. Any payments scheme, processor, switching company, service provider or

bank that contravenes this policy may be suspended for a minimum of one (1) month by the CBN as a processor, switching company, service provider etc in the first instance. The license may be withdrawn by the CBN if the contravention is repeated.

“This policy shall apply to both private and public sector transactions.  All financial institutions including Deposit Money Banks, Savings and Loans, Mortgage and Microfinance Banks shall comply accordingly.

“Compliance with the policy shall be monitored by the Banking Supervision Department and the Other Financial Institutions Supervision Department with appropriate sanction applied to erring institutions.

“While the Central Bank of Nigeria will make general announcements and carry out public awareness programmes individual banks are expected to do same. The affected customers of banks should be informed in good time by the banks with clear advice on alternative electronic payment channels available to them.”

http://www.vanguardngr.com/2011/04/cbn-imposes-limits-penalty-on-cash-transactions/
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by egift(m): 10:05am On Apr 29, 2011
What business has Sanusi in people's money?
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by seanet02: 10:12am On Apr 29, 2011
This is Pure Rubbish and Nonsense. What the heck is his Business if i want to withdraw over N150,000?
This man is going somewhere else,
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by emans(m): 10:15am On Apr 29, 2011
rubbish!!!!!
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by chelseabmw(m): 10:24am On Apr 29, 2011
this is out of bound
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 10:28am On Apr 29, 2011
we need a cashless society to reduce the following:

1. cost of printing cash
2. robbery
3. queue in the banking hall
4. stress from both bankers and customers
5. promote electronic banking
6. signature irregularities e.t.c

its a welcomes development but massive sensitization needs to start now
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by efisher(m): 10:29am On Apr 29, 2011
This looks like half of the story. What are the options? What new policies will be introduced to ensure customers are guaranteed the use of e-payment options? What infrastructure will be put in place to make cashless transactions easier and safer? I don't think CBN is that stupid to make such one sided decision. The idea is good only if better alternatives exist.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by MaiSuya(m): 10:36am On Apr 29, 2011
By Babajide Komolafe
From June 2012, individuals that make cash withdrawal or deposit above N150,000 would pay a fine of N100 per extra N1,000, while corporate organisations that make cash withdrawal or deposit above N1 million would pay fine of N200 per extra N1,000.

let me get this right. so if i wan withdraw like 1 milla, I'll have to pay extra 10k as fine??
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Sunofgod(m): 10:38am On Apr 29, 2011
It sounds like a 'Stealth Tax' that's being imposed on people and business transactions.

Possibly a World Bank directive.

Such a move will contribute to inflation.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by 10cirenoh: 11:03am On Apr 29, 2011
Why didnt this happen before election period?
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by efisher(m): 11:08am On Apr 29, 2011
Mai Suya:

let me get this right. so if i wan withdraw like 1 milla, I'll have to pay extra 10k as fine??

@ Mai Suya, it means you pay extra 85k penalty for a cash transaction of 1 milla! shocked
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by egift(m): 11:13am On Apr 29, 2011
10cirenoh:

Why didnt this happen before election period?

grin grin grin grin Don't be surprise if more is on its way. This is milking industry.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by jarkbauer: 11:15am On Apr 29, 2011
all of you are fools.the usual baseless rants on nairaland.Sanusi is moving Nigeria in the direction of the rest of the world,cashless, you are saying.jargon.useless mofos
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 11:23am On Apr 29, 2011
jarkbauer:

all of you are fools.the usual baseless rants on nairaland.Sanusi is moving Nigeria in the direction of the rest of the world,cashless, you are saying.jargon.useless mofos
ur teachers owe u a refund for incomplete tutorship and ur parents,an apology for inproper grooming

@ topic, i guess the limit is per account,so u can withdraw 150k from 10 different accounts and still have ur 1.5mil without a fine wink wink
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by otokx(m): 11:26am On Apr 29, 2011
inasmuch as he is trying to control liquidity, a lot of people are loosing faith in depositing money in the bank and may resort to keeping it at home with a gun and lots of bullets.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 11:27am On Apr 29, 2011
otokx:

inasmuch as he is trying to control liquidity, a lot of people are loosing faith in depositing money in the bank and may resort to keeping it at home with a gun and lots of bullets.
Thank you my brother, that is exactly what will happen, I hope mr president rejects the move
jarkbauer:

all of you are fools.the usual baseless rants on nairaland.Sanusi is moving Nigeria in the direction of the rest of the world,cashless, you are saying.jargon.useless mofos
You will prevent me from calling you a bigger fool by explaining the measures put on ground for such large transactions. Here is a scenario, I want to pay labourers in my remote community where there is no bank. How do I go about it. I want to buy a laptop at ikeja. Please make sense out of this rubbish
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by efisher(m): 11:34am On Apr 29, 2011
@ aguiyi, it's like you just read my mind. Immediately after reading the article, I made up my mind to resurrect all my dormant accounts, open new ones and issue multiple cheques for one account. Many people will end up operating several accounts to escape paying this fine.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by ektbear: 11:37am On Apr 29, 2011
This sounds fascist. How is it their business what people do with their money?
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 11:39am On Apr 29, 2011
ekt_bear:

This sounds fascist. How is it their business what people do with their money?
Eeeeeeeeer follow the others, I have accounts with oceanic, zenith, afri bank, will open my gt and fidelity soon and begin the wealth sharing. . . hahahahahahaha
efisher:

@ aguiyi, it's like you just read my mind. Immediately after reading the article, I made up my mind to resurrect all my dormant accounts, open new ones and issue multiple cheques for one account. Many people will end up operating several accounts to escape paying this fine.
That's true ooooo, nigerians  and back door things I hail ooooooo grin grin grin
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by naijaking1: 11:47am On Apr 29, 2011
Another attempt to kill banking in Nigeria as we know it. Why is he not starting this craziness in Kano, Kaduna or Sokoto first?
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by ektbear: 11:56am On Apr 29, 2011
Won't the end result be people keeping more cash on them? So doesn't it kind of defeat the purpose? undecided

I dunno
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 12:07pm On Apr 29, 2011
There is still a large number of people that don't even have an ATM card.so how will this new policy work out especially among the rural Nigerians ?
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by seanet02: 12:17pm On Apr 29, 2011
This Fulfude speaker seems to be losing his senses.
This is barbaric and should be challenged at the court.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by efisher(m): 12:28pm On Apr 29, 2011
For deposits, simply fill multiple deposit slips with different depositor names.  grin

There are better ways to encourage cashless transactions. Instead of imposing ridiculous fines on cash transactions, why not introduce incentives for making cashless transactions.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 12:33pm On Apr 29, 2011
efisher:

For deposits, simply fill multiple deposit slips with different depositor names. grin

There are better ways to encourage cashless transactions. Instead of imposing ridiculous fines on cash transactions, why not introduce inentives for making cashless transactions.
My brother thank you
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by MaiSuya(m): 12:40pm On Apr 29, 2011
naijaking1:

Another attempt to kill banking in Nigeria as we know it. Why is he not starting this craziness in Kano, Kaduna or Sokoto first?

are you ok did he tell you he's restricting the policy to a section of the country?

@topic, you'll have to admit the cashless economy is not really a bad idea. if anything, it will help stem corruption which is fulled in part by unrestrained access to ready cash.

the problem perhaps is the way he has gone about it. incentives, like efisher is proposing may not be a bad idea. . .

then again what incentives are we talking about??
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by efisher(m): 12:43pm On Apr 29, 2011
Incentives like access to credit. There are many more ways and the bankers know it.

The idea is that an alternative should always be provided before removing the bread from people's mouths.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Odunnu: 12:43pm On Apr 29, 2011
Hope my MD reads ths before he accuses me of stealing N100 per N1k over
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 12:46pm On Apr 29, 2011
efisher:

Incentives like access to credit. There are many more ways, and the bankers know it.

T[b]he idea is that an alternative should always be provided before removing the bread from people's mouths.[/b]
Unfortunately, power drunk institutional managers in nigeria do not know this
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by Nobody: 12:49pm On Apr 29, 2011
Mai Suya:

are you ok did he tell you he's restricting the policy to a section of the country?

@topic, you'll have to admit the cashless economy is not really a bad idea. if anything, it will help stem corruption which is fulled in part by unrestrained access to ready cash.

the problem perhaps is the way he has gone about it. incentives, like efisher is proposing may not be a bad idea. . .

then again what incentives are we talking about??

Are you serious ? How many almajiris own a common ATM card or bank account ?
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by ektbear: 1:01pm On Apr 29, 2011
Dunno about the UK, but the incentives we have here in the US are pretty much penalties on people who use primarily cash.

For example. . . I have a reward's credit card that gives me back 1% on purchases. I think the CC company charges the salesman 2% of the value of whatever he sold to me. So the CC company keeps 1% for himself, gives me 1%.

In effect, the salesman has to pass on some of this increased cost to the customers, in terms of increased prices. So those who do NOT use credit cards effectively subsidize those who do. So in other words, there is incentive to switch from cash to credit card.

So maybe the CBN isn't too far off with this idea? I'm not sure.

There probably is not a way on earth to encourage card usage without penalizing cash users.
Re: CBN Imposes Limits, Penalty On Cash Transactions, Again! by efisher(m): 1:10pm On Apr 29, 2011
@ ekt_bear, you got the point. For every penalty on cash transactions, there should be an incentive on cashless transactions. That's exactly how it should work. CBN needs to ensure the alternative route is well developed and accessible to all before introducing strict penalties. The way it has been presented, people will still find a way around it but the bankers will have more work on their hands. By the time Mr. Cashier is treating 10 tellers for 1 transaction, they will start crying out.

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) ... (12) (Reply)

UPDATED - [Shippyme.com Is A Nightmare Waiting To Happen To You.] / Jumia Dispatch Rider Punches & Manhandles Customer For Rejecting An Item / Our Refinery Will Supply First Product To Market By July, Says Dangote

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2024 Oluwaseun Osewa. All rights reserved. See How To Advertise. 47
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.