12 February 2014

Nigeria: Cashless Policy to Start Nationwide

The Bankers' Committee Tuesday resolved to extend the cashless policy to all states in the country from July 1, 2014.

Speaking to journalists at the end of a meeting by the committee in Lagos, the Head, Shared Services, Central Bank of Nigeria (CBN), Mr. Chidi Umeano, said the decision was taken as a result of the success recorded in states where the policy had been implemented.

The cashless policy aims at reducing the dominance of cash in the system. It was initially introduced in Lagos in 2012 and thereafter, was extended to Ogun, Rivers, Anambra, Abia, Kano states as well as the Federal Capital Territory last July.

Throwing more light on the decision to extend the policy to other states, Umeano explained: "A decision was reached today that the cashless initiative would now be deployed nationwide. From the success we have recorded in those areas, we have now decided as an industry to move it to other states in the country.

"In other words, by July 1, we are going live in all the states of the federation. As you well know, this is a critical part of the payment system modernisation and the success registered so far has been very impressive."

According to Umeano, statistics have shown that there been a significant improvement in electronic banking channels.

He put the daily value of transactions on the Nigerian Electronic Fund Transfer at N123 billion and N50 million for Point of Sale (PoS).

Also speaking at the media briefing, the Chief Executive Officer, First Bank of Nigeria Limited, Mr. Bisi Onasanya while responding to questions on the recent 75 per cent Cash Reserve Ratio (CRR) imposed on public sector deposits by the Monetary Policy Committee (MPC), said the resolution of the crisis in Iran as well as the impact of the tapering and investment outflow from Nigeria, were major factors that led to the indirect monetary tightening measure.

In fact, the First Bank boss revealed that the central bank informed the committee that it may further hike the CRR to 100 per cent if it does not see improvement in foreign exchange earnings.

"Once you move from 50 per cent to 75 per cent, there is only a limit to how far you can go and the worst case scenario is to move to 100 per cent," he said. According to Onasanya, given the dwindling revenues from oil and the impact on foreign reserves, it was apparent that the options available to the central bank and the MPC were reduced.

"The measure was taken in order to ensure that we continue to address the exchange rate problem in Nigeria. We also agreed that there is a need to do a lot more to ensure that there is accretion to external reserves as a basis for defending the currency which is a major focus of this regime.

"There is no country that will just allow its exchange rate to be left and not managed. The mere fact that those actions have been taken also indicates the fact that the central bank is willing to do everything within its power to ensure that the currency is not devalued," he explained.

On his part, the Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe,said the Bankers' Committee would launch a biometric solution by Friday. The Access Bank boss stated that the committee over the years, been working on improving Know-Your-Customers (KYC) in the industry. This, he said would fight money laundering and encourage consumer lending.

"Hopefully with this, all the banks would be able to strengthen their KYC and to combat money laundering and of course prevent fraud," Wigwe said.

In order to promote financial inclusion, the Deputy Managing Director, Guaranty Trust Bank Plc, Mrs. Cathy Echeozo said the committee agreed that on March 13th, the CBN governor, the deputy governors of the CBN and bank chief executives would go round schools across the country to campaign on the need for every one to have a bank account.

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