The Central Bank of Nigeria (CBN) has been moving back and forth over the cashless banking policy it initiated to ease the pressures on cash transactions in the banks across the country. The most recent of such policy inconsistency was the announcement at the end of the 307th edition of the Bankers Committee that took place in Lagos last week that the nationwide implementation of the policy will now take effect from July 1. This is against the earlier date of December 31, this year.

The decision to fast-track the implementation, Mr. Philip Oduoza, Group Managing Director, United Bank for Africa (UBA) Plc said on behalf of the Bankers Committee, was informed by what he called the “success of the Lagos pilot experiment” which began on January 1, this year. He said the Bankers Committee was “satisfied” with the Lagos experiment and therefore agreed that July 1, would be the ideal take off date, nationwide. However, there are hints that CBN would try a phased approach, in which case, the implementation will start in commercial cities with high customer traffic. Cities suggested include Abuja, Port Harcourt, Aba, Onitsha, Nnewi and Kano.

We however, disagree with the Bankers Committee that the Lagos pilot experiment was a ‘huge success’. On the contrary, many banks and customers in Lagos have complained of operational hiccups. Some customers insist that no adequate enlightenment has been done to carry customers through the process, leaving many customers short on the details of the ‘dividends’ of the scheme, as many human-induced problems persist. These include frequent exemptions of target groups to be affected by the policy.

We recall some of the inconsistencies in the policy. When it was rolled out last year, the apex bank pegged daily cash withdrawal for individuals and corporate bodies at N150,000 and N1 million, respectively, and fixed the initial take-off date nationwide for June 2012. Few weeks later, the CBN altered the cash withdrawal and deposit limits, saying it discovered that some changes have become necessary. Consequently, it fixed cumulative daily cash withdrawal/deposit at N500,000, for individuals, and N3 million for corporate accounts.

Though the CBN as the main regulator of the banking sector is at liberty to make changes in any monetary policy it deems necessary for the good of the economy, any policy inconsistency suggests that a particular plan is not well thought-out, or was indeed, rushed through. We think that is the case with the cashless policy. The CBN has made many detours on the same issue, leaving customers apparently confused and ill-prepared to continue on the journey.
We believe that the cashless policy was packaged in a haste, even though the benefits could be salutary to customers, the banks and the economy. Since the policy took off in Lagos, there has not been unanimity of opinion as to its efficiency. Even banks staff are fretting that the policy might result in lay-offs. That worry is only part of the larger operational concerns in the Lagos area.

We are not disproving that the cashless policy is not a noble monetary plan that could help ease the current pressure on the increasing dominance of cash transactions in our economy. As we have argued earlier when the policy commenced in Lagos, it is one thing to borrow a good idea, but the success of such an idea must take into cognizance the peculiar economic environment of the country and the citizens’ response to the policy in question.

Our position remains that enough groundwork has not been done to warrant full implementation of the policy nationwide, from July 1, 2012. Our country, and even the banks, are not totally networked to run a seamless cashless economy. Therefore, trying to force through the policy as the CBN and the bank CEOs are trying to do, amounts to forcing a toddler to walk without making sure he is not crippled. T here is still need to reappraise the policy before rolling it out, nationwide.

http://sunnewsonline.com/webpages/opinion/editorial/2012/may/16/editorial-16-05-2012-001.html

Since the policy took off in Lagos, there has not been unanimity of opinion as to its efficiency. Even banks staff are fretting that the policy might result in lay-offs. That worry is only part of the larger operational concerns in the Lagos area.
Hm! While am not against this policy my concern lies on its implication on the job sector. Banks nowadays are just looking for means to cut cost(am not against that but what of the job sector especially with this difficult period). This is a programme that was scheduled to commence by December now they moved it forward to July. Naija I Hail Thee.