Anxiety As Withdrawal, Deposit Charges Begin

Central Bank of Nigeria

●Financial inclusion, cashless projects may suffer ●Banks to blame for parallel market rate rebound ●CBN to inject to more forex this week

There are concerns over the fate of the nation’s financial inclusion project as the first phase of planned full implementation of the accompanying cash-less projects take full course today.

The Guardian Nigeria report continues:

Although slated for April 1, which falls on the weekend, the full take off of the policy will begin today as financial institutions, markets and all corporate activities resume weekly operations.

As the new phase in the nation’s payments system begins, it is either the stakeholders have understood the rules and play by it or react negatively due to perception, with attendant effects on the overall goal of deepening financial inclusion.

Already, analyst said the move is timely and all about using various alternate channels for transactions aside from cash and has nothing negative to do with financial inclusion.

Meanwhile, the surprised rebound of speculators and the parallel market rates at the weekend, which closed at ₦394/$, against ₦375/$ on Wednesday, has been blamed on defiance to rules by some banks.

The development came just as Central Bank of Nigeria (CBN) sustained its dollar intervention in the market for more than five weeks, after it took a new policy direction to liberalise further the foreign exchange market.

According to the schedule of the cash-less policy drive, Lagos, Ogun, Abia, Kano, Anambra, Rivers states and the Federal Capital Territory has taken off. In these states, individuals can only withdraw or deposit money to the tune of ₦500,000 in a single bank account per day without charges.

This means that any withdrawal above ₦500,000 to ₦1 million will attract two per cent charge; between ₦1 million and ₦5 million, three per cent; and above ₦5 million will get 7.5 per cent charge.

On the other, deposits above ₦500,000 will attract 1.5 per cent charge; between N1 million and ₦5 million, two per cent; and above ₦5 million, three per cent. For corporate organizations, only withdrawal and deposit of N3 million will be without charges.

Deposits between ₦3 million and ₦10 million will get two per cent charge; above ₦10 million to ₦40 million, three per cent; and more than N40 million will be charged five per cent. On the other hand, withdrawals between ₦3 million and ₦10 million will be charged five per cent; above ₦10 million to ₦40 million, 7.5 per cent; and more than ₦40 million will be charged 10 per cent.

Meanwhile, the second phase will take off on May 1, comprising Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau states. Dispelling the fears of derailing financial inclusion projects, Executive Director, Finance, BGL Captal Limited, Femi Ademola, said the rural mass target in financial inclusion has no ₦500,000 daily transactions to make.

According to him, those with such amount are already in the financial system and have access to multiple channels of payment, which are free and without limit. “The policy is just about letting people do transactions without physical cash. That is where the world is going. You have cheque, Point of Sale, transfers through ATM, mobile phone, Internet banking, even the latest USSD code. These are without charges. There is no discouragement and there is nothing to fear,” he said.

However, a reliable source from the apex bank told The Guardian yesterday that Nigerians are beginning to find out where the real problems are coming from, if banks at this point would have the audacity to tell wicked lies about CBN’s supply of forex to them.

“How can banks refuse to sell forex to retail segment now? How can they prove the claim that there is not enough supply for the retail segment? It is just that they cannot do as it pleases them. But they will hear from us soon,” the source said.

The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, at the weekend, told journalists that banks refused to sell the dollars as directed by the apex bank and lamented the reversed fortune of the naira at ₦394/$, more than 10 per cent depreciation. “CBN’s knack for last minute solution in recent times is the reason for the misfortune of the naira at the foreign exchange market.

“It is evident that the injection of liquidity to the interbank market rather than the BDC sub-sector is not effective and transparent for sustained exchange rate convergence and unification.

“About 20 banks get US$80 million weekly for invisible transactions, while US$20 million weekly is shared among 3000 CBN licensed BDCs nationwide. The banks will not help in this matter and transparency cannot be assured,” he said.

CBN, in a statement at the weekend, laid credence to Gwadabe’s claim, when it confirmed the worrisome development that some customers seeking to buy forex for business/personal travel allowances, medical and school fees are being frustrated by some banks with the false claim that the CBN is not allocating enough forex to them.

While the apex bank refuted the insinuations, which held down the free flow of forex in the liberalised retail segment of the market, it now urged any customer not attended to within 24 hours for BTA/PTA or 48 hours for tuition and medical fees to call 07002255226 or send an email to cpd@cbn.gov.ng, with the name and branch of the non-cooperating bank.

“Indeed, on a weekly basis, the CBN has been selling at least $80m to banks for onward sale to their customers for these invisible items. No customer should accept to buy forex from any bank at more than the currently prescribed rate of N360/$,” CBN’s spokesman, Isaac Okorafor, said.

He warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end users.Similarly, there are strong indications that CBN is set to inject more fund into the foreign exchange market with a view to ensuring liquidity in the interbank market and crashing the parallel market rate.

This is in addition to the planned increase in sale volume to the bureau de change operators from US$8,000 to US$10,000 dollars per week. The move by the apex bank seems to be returning calm among traders against earlier apprehension over the ability of the CBN to sustain the intervention.