Lagos — The governor of Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi said yesterday that by year 2020, about 15 million unbankable Nigerians would be brought into the formal banking system.

Speaking in Akure at the 17th seminar for Finance correspondents and Business editors, Sanusi who was represented by a member of the CBN Board, Professor Sam Olofin, said the cashless policy was designed to break the traditional barriers hindering financial inclusion for millions of Nigerians and bring low cost, secure and convenient financial services to urban, semi-urban and rural areas across the country especially through the mobile payment services.

He said: "An efficient and modern payment system is positively correlated with economic development and serves as a key enabler for economic growth. From the regulatory angle, this policy will also create environment for more effective monetary policy implementation, create a more stable pricing system and curb the menace of inflation which is a deterrent to the growth and development of any economy."

Sanusi said with the cashless policy, CBN would be able to mitigate some of the negative consequences associated with the high usage of physical cash in the economy and the high cost of handling cash.

"There is a subsisting myth that the cashless policy will hurt the low income group adversely. In truth, many of them cannot, with the volume of their transactions," he said.

The CBN governor said in a survey conducted by the bank, it was discovered that only 10 per cent of daily banking transactions are above N150,000 while 10 per cent account for majority of the high value transactions.

"This suggests to us that the bulk of the banking population subsidises the cost that the tiny minority of 10 per cent incurs in terms of high cash usage. High cash usage results in a lot of money circulating outside the formal sector, thereby limiting the effectiveness of monetary policy," he said.

He said despite the introduction of the cashless policy, the banking penetration level is still very low in Nigeria adding that many people still prefer to keep their money in their own vaults rather than lodge them in banks.