The Central Bank of Nigeria has introduced a new cashless banking policy, which will be implemented in June 2012. Bank officials say it will enhance convenience, savings and the economy. Others doubt the reliability of new banking technologies and the ability of the general population to use them in Nigeria, where the majority are “unbanked.”
LAGOS NIGERIA- Ibukun Emuwawon, 29, a professional songwriter and music producer, says he stopped using an ATM card after a recent experience at an ATM in Lagos, a state in southwestern Nigeria. He says the automated teller machine deducted money from his account without dispensing any money.
“I walked over to an ATM belonging to a bank different from mine, put the card in the machine, pushed the keys for the amount I needed and bingo – debited, but no money came out,” he says.
He says his card was stuck in the machine longer than usual but came out eventually. He reported the incident to his bank and filed a reclaim form. He says that everything was rectified after three days, but that his distrust of ATMs has endured.
“Since then, I stopped using ATM cards and all,” he says.
Emuwawon says this experience makes him wary of the new move by the Central Bank of Nigeria, CBN, to implement a cashless banking policy.
The CBN plans to implement the cashless banking policy in June 2012. Bank representatives say the policy will enhance convenience and savings for Nigerians and the government, as well as elevate the economy to be more competitive internationally. But many Nigerians who have had negative experiences with ATMs say the country isn’t ready to go cashless, especially as the majority of the population doesn’t yet use banks. Bank employees welcome the policy but say certain changes must precede it.
Nigeria aims to be a top-20 economy in the world by 2020, according to Nigeria Vision 20: 2020, a government plan.
Yet roughly 65 percent of adult males, 77 percent of adult females and 80 percent of Nigeria’s rural population are unbanked, according to a 2010 survey by Enhancing Financial Innovation and Access, a nonprofit organization that promotes financial sector development and financial inclusion in Nigeria. Banked denotes having access to or using a deposit money bank, in addition to having or using other financial services, such as an ATM card, credit card or savings account. Most of the banks in Nigeria are located in urban areas, excluding those in rural areas from various banking innovations.
One such innovation is the cashless banking policy recently proposed by the CBN to reduce the amount of hard cash in circulation and encourage the culture of e-payment in Nigeria.
As of June 1, 2012, commercial banks and allied service providers won’t allow cash withdrawals and deposits to exceed 150,000 nairas, $980 USD, for individuals and 1,000,000 nairas, $6,555 USD, for corporate entities. Banks also won’t cash third-party checks for more than 150,000 nairas, $980 USD, according to the CBN.
An officer at the CBN corporate communications office in Lagos, who declined to be named because only the spokesman is authorized to talk to the press, says that any transaction exceeding these amounts will be charged a fee. He says that this is to encourage e-payment transfers.
In the current system, people are allowed to withdraw cash from their bank account over the counter without any restriction or through ATMs with limited daily withdrawal, depending on the bank. Click to read the full story on GLOBAL PRESS: http://www.globalpressinstitute.org/global-news/africa/nigeria/nigerians-debate-pros-and-cons-new-cashless-policy#ixzz1U1TJdiRk