Strengthening e- banking for effective implementation of the new CBN cash withdrawal limit policy

In November this year, the Central Bank of Nigeria CBN), came up with a new fiscal policy which seeks to regulate all cash-based transactions, particularly over-the-counter and Point of Sale (POS) withdrawals by individuals and corporate entities in Nigeria. Many think that this new cash- withdrawal- limit- policy is a crystallization of the recent redesign of some naira notes believed to be a vista for major transformational shift expected in the fiscal policy framework that will drive the economy of the country.

The CBN had pegged that over-the-counter cash withdrawals by individuals and corporate entities do not exceed one hundred naira and fifty naira respectively, per week. It further said maximum cash withdrawals per week via Automated Teller Machine (ATM) should be one hundred naira, subject to a minimum of twenty thousand naira cash withdrawals per day. This policy, according to the apex financial institution in Nigeria, is to take effect from 9th January, 2023.

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However, since the announcement of this policy was made by the CBN, a lot of debates from the Nigerian public, for and against it have held at many fora and gatherings. While some financial analysts speak of the merits of the policy, others bemoan the apex body for the policy said to be ill-timed and small business- inconsiderate which may exacerbate the free fall the Nigerian currency is going through at the moment.

Besides the public, the two houses of the National Assembly –  the Senate and the House of Representatives have also varied in their observations regarding the policy. What is however obvious as seen in the body language of the CBN is that it remains undaunted, despite all of the backlashing and will most likely abide by its deadline of 9th January, 2023.

This stiff-necked position of the CBN has been demonstrated through its many statements and assurances to the Nigerian teeming population of the ideals of the policy when implementations commence and its positive rippling effects on the economy.

With this resolve by the CBN, it is therefore expedient that for the apex financial body to allay fears of many Nigerians regarding the thinking of the negative impact the policy may have on small businesses in particular, adequate supportive infrastructure must be built in order to strengthen the policy and give it the needed success. A policy such as this that hinges on the economy of the country cannot produce meaningful results if no effort is spared in ensuring the putting up of infrastructure.

The CBN must, as a matter of importance, seek collaboration with the Nigerian Communications Commission (NCC) to ensure that all the commercial banks and even specialised banks as well have network services that are infallible or close to this. It will be a serious policy summersault for bank customers to continue to suffer debits from transactions not delivered or even failed transactions after this very cash- withdrawal -limit policy has taken off.

The apex bank should also work towards making sure that it plays more of a supervisory role to banks than being advisory or just a policy implementer, so that all the banks will have a burden that they owe their customers a duty of ensuring that their ATMs always dispense money to customers. It can be a frustrating experience for an individual to go to an ATM for some urgent withdrawals, for instance, and not have it dispense cash. This malady, sadly, has been a recurring decimal in financial transactions involving almost all the commercial banks in Nigeria.

More e-banking platforms should also be created. This will give bank customers multiplicity of channels to transact and carry out their businesses, thereby cushioning what may otherwise stand as a lacuna, especially to small businesses that may require urgent transactions. It is not enough to want to implement a policy without holistic considerations of instruments that can support such a policy. This is why the apex bank should take a lot at the policy vis-a-vis the platforms available to Nigerians.

If the CBN will put all these measures in place, the merits of the policy will certainly impact the economy of the country and also help to rescue the naira from its ongoing free fall.