The Central Bank of Nigeria on Thursday defended the cash withdrawal limits policy, insisting that it was not targeted at vulnerable people.

Defending the policy while appearing before the House of Representatives, the Deputy Governor, Financial System Stability, CBN, Aisha Ahmad, declared that Nigeria could operate a cashless economy, noting that about 94 per cent of cash withdrawals through personal accounts were less than the revised N500,000 per week, while 82 per cent of those via corporate accounts were less than N5m.

Ahmad represented the CBN Governor, Godwin Emefiele, who had twice failed to appear before the lawmakers to defend the policy which had generated a groundswell of opposition from Nigerians.

The apex bank had informed the House that Emefiele would not appear before the House in person, rather, Ahmad would lead the Committee of Governors before the lawmakers.

In her presentation to the House, the CBN deputy governor also noted that while some critics had expressed fears about the lack of commercial bank branches, especially in rural areas, data obtained by the CBN showed that people in remote locations had embraced online banking options.

Ahmad also announced that the CBN ordered 500 million notes of the redesigned N200, N500 and N1,000 denominations through the Nigerian Security Printing and Minting Plc.

Cashless policy

Ahmad, who asked for five minutes to explain the policy to the lawmakers, recalled that the cashless policy was first launched in 2012 based on sections 2(d) and 47 of the CBN Act.

She also recalled that the CBN commenced the pilot test in Lagos State where it introduced limits on transactions of N500,000 and N3m for individuals and corporate customers, respectively, and with charges for any amount above these.

She added, “The pilot was very successful and following that, the policy was extended to six other states – Abia, Anambra, Kano, Ogun and Rivers – in July 2013. Over the years – and it has been 10 years now since we first launched this – the policy had been amended severally due to feedback from stakeholders and also to ensure that we develop the infrastructure and financial access points required to support the policy.

“We suspended processing fees on excess lodgment in the past, in 2014. In 2017 and 2019, we also suspended the nationwide rollout of the cashless policy. Currently, we suspended fully any payments or charges on excess lodgment.”

The CBN deputy governor further noted that the nationwide limits set by the CBN, which was announced on December 5, 2022, was a continuation of the cashless policy initiated 10 years ago, “and it was in recognition of the positive changes that have happened in the financial and payment system since the cashless policy was first launched.”

According to the CBN boss, some of the changes include “a wide proliferation of financial access points. In 2012, thereabouts, we were still talking about bank branches as the only source of access to financial services.”

She stated, “Today, we have a very robust payment system that includes bank branches, branches of micro-finance banks, POS machines, ATMs, agent banking, e-Naira and many other options.

“To be specific, between the bank and the micro-finance banks, we have 6,500 locations, 900,000 POS terminals, 14,000 ATMs across the country and 1.4 million agents nationwide; and every local government area in Nigeria has agents represented. We have also seen a proliferation of electronic transactions.

“Just by way of a quick example, in 2012, we had N48bn in POS transactions. Today, we have N6tn in POS transactions. On electronic transfers, we had N3tn in 2012; today we have N300tn as at October 2022. That is a 7,000 per cent increase.

“We have also seen an improvement in financial inclusion to 64.1 per cent and lastly, perhaps, more importantly, we have seen the evolution of the Nigerian payment system on the global stage. Nigeria is adjudged 6th in the world for an instant, real payment and we are only behind countries like India, China, Thailand, Brazil and South Korea. We are the only African country in the top 10 and this has been as a result of some of the initiatives that have gone on.’’

Giving more data, Ahmad further stated, “Also, electronic payment and real-time data payments have been estimated to contribute about 0.67 per cent to our GDP.