CBN on Tuesday all banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100, 000 and N500, 000, respectively, per week.
The House of Representatives has summoned the Central Bank of Nigeria Governor, Godwin Emefiele, over the new restrictions on cash withdrawals.
The House resolved that Mr Emefiele should appear before it next Thursday.
The decision to summon Mr Emefiele followed a motion of matter of urgent public importance moved by Aliyu Magaji (APC Jigawa) on Thursday during plenary.
In a memo issued on Tuesday, signed by the Director of Banking Supervision, Haruna Mustafa, the apex bank directed all banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100, 000 and N500, 000, respectively, per week.
In the new development, CBN directed that only N200 and lower denominations should be loaded into banks' ATM machines.
The lawmakers resolved that the CBN should halt the implementation of the policy until the probe is concluded.
The motion
In the motion, Mr Magaji said small businesses, which are the major drivers of the economy, depend on cash for transactions. He added that the owners of these businesses are going to be negatively impacted by this policy.
He stated that although the CBN has the statutory power to implement monetary policy, however, the policy will have a negative impact on the economy at large.
"Although the Central Bank of Nigeria has the right to issue monetary policies on the Nigerian economy to be able to guide and direct the economy to the right part of recovery and growth, however, the new policy rolled out by the Central Bank of Nigeria (CBN) will definitely have a negative impact on the already dwindling economy, and further weakens the value of the Naira as Nigerians may resolve to use dollars and other currencies as a means of trading and thus further devalue Naira and weakens the economy," he stated.
The lawmaker further stated that most rural dwellers fall within the unbanked, hence, the policy will impact their economic activities.
"It is good to have a cashless policy but we seem to be borrowing ideas and policies from other countries that are far ahead of us. We are comparing ourselves with the United States and the United Kingdom. These people are far ahead of us. We will get there one day but this type of policy disturbs the people that voted for us.
"The issue affects everyone, most of our people are in rural areas and everything is being done in Naira and cash. And somebody will wake up and make a policy that will start tomorrow, no consultation," he stated.
Also speaking in support of the motion, Aminu Suleiman (APC, Kano), said CBN appears to be too distanced from the people with the policy.
The lawmaker also argued that allowing the policy to go unchallenged could have political consequences for the lawmakers. According to him, the policy could be their "exit board."
"This could be an exit board for many of us if we allow this radical decision to succeed and, therefore, my voice must be heard on this.
"There are several government chief executives in this country that have outlived the essence of their positions because I cannot simply understand how we can wake up one day and introduce this draconian approach to businesses, giving Nigerians one month to adjust their belts," Mr Suleiman stated.
The motion was opposed by the Minority Leader, Ndudi Elumelu (PDP, Delta), who defended CBN's policy and described it as the best thing to happen to this country.
His argument was on ending ransom collection by kidnappers and bandits. He noted that the policy will make it hard for bandits to collect ransom.
"Part of the problems... ... that is enforcing kidnapping and all vices that are very inimical today, if you go to the communities today, they will ask them to contribute money. It is because there is cash everywhere.
"If you want to stop banditry, make it impossible for them to have cash, there should not be available cash for them," he said.
Mr Elumelu also informed his colleagues that the CBN is acting within the CBN Act, a law made by the same federal lawmakers. He admonished his colleagues to change the law if they are not comfortable with the action of the CBN.
"We passed the law on this floor, it is our law. The fact that the CBN has been sleeping all this while and never went into the law we passed and to follow it to the letter does not mean that it was not there.
"They are only now waking up to implement the law we sent to them. If we want to amend it, we have to amend the law. it will not come by a resolution and that is the truth," Mr Elumelu said.
Similarly, Dachung Bagos (PDP, Plateau) also supported the policy based on security. He, however, urged the House to get an explanation from the CBN governor on the policy.
Mark Gbillah (PDP, Benue) raised a point of order that the CBN governor violated Section 8 subsection 4 of the CBN Act by not informing the House about the implementation of the policy.
He explained that the CBN Act mandates the CBN governor to brief the National Assembly bi-annually on its polices and programmes. He noted that Mr Emefiele has not been discharging this responsibility.
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"The Governor shall appear before the National Assembly at semi annual hearings, as specified in subsection 1 regarding efforts, activities, objectives and plans of the board with monetary policy and economic development and prospects foro the future," section 8(4) reads.
Mr Gbillah added that subsection 5 also says that "the governor shall from time to time make a formal report and presentation on the activities of the board and the performance of the economy to relevant committees of the National Assembly."
The lawmaker also raised questions on the source of funding for printing the new currencies. He stated that the money was not appropriated by the National Assembly.
Before putting the motion to question, the Speaker, Femi Gbajabiamila, said he will interface with the President of the Senate, Ahmad Lawan, on a possible joint session.
He added that if a joint session is not possible, the CBN governor should appear before the House.
"If you want to comply with the Act, ordinarily he should be appearing before the whole National Assembly. I think you will allow me to speak to the Senate President and see whether, in compliance with the Act, we can have a joint session," he said.
When the motion was put to question by Mr Gbajabiamila, members overwhelmingly supported and passed it.
