Banks May Lose Deposits Over N0.15m Withdrawal Cap
- By Saka Khaliq
- Published May 31st, 2011
- News
- Unrated
There are strong indications that commercial banks as well as microfinance institutions operating in the country may lose deposits next yearif the N150,000 daily cash withdrawal and lodgement limit stands, BusinessWorld can now reveal.
BusinessWorld investigations can reveal that banks may have to face the consequence of the Central Bank of Nigeria(CBN)’s policy as there are indications that the rate of savings by Nigerians will crash. The CBN had recently pegged a limit of daily cash withdrawal and lodgement by individual at N150,000 and corporate customer at N1million. The policy will take effect in June 2012.
Investigation shows that banks may have to struggle next year to mobilise deposits especially from the grassroots as many urban dwellers are not ready to embrace the CBN daily withdrawal limits.
Though the motive of the policy is to reduce dominance of cash in the economy, reduce the cost of managing cash and possibly eliminate money laundering, findings show that Nigerians may resort to keeping cash in their homes in order to meet their daily cash needs.
Moreover, as majority of Nigerians have yet to embrace electronic bankingand modern payment systems, analysts said that it would be hard to convince them to embrace such policy. Only few people in the informal market were said to be using ATM cards for transactions, hence, the adoption of this policy by the artisans remains a serious doubt.To this end, they will resort to keeping money in the house, which will be to the detriment of the banking sector and the economy.
Experts who spoke to BusinessWorld over the weekend said, implementing a policy like this means putting the cart before the horse, because it is obvious the system is not yet ripe for cashless transactions.
BusinessWorld investigations can reveal that banks may have to face the consequence of the Central Bank of Nigeria(CBN)’s policy as there are indications that the rate of savings by Nigerians will crash. The CBN had recently pegged a limit of daily cash withdrawal and lodgement by individual at N150,000 and corporate customer at N1million. The policy will take effect in June 2012.
Investigation shows that banks may have to struggle next year to mobilise deposits especially from the grassroots as many urban dwellers are not ready to embrace the CBN daily withdrawal limits.
Though the motive of the policy is to reduce dominance of cash in the economy, reduce the cost of managing cash and possibly eliminate money laundering, findings show that Nigerians may resort to keeping cash in their homes in order to meet their daily cash needs.
Moreover, as majority of Nigerians have yet to embrace electronic bankingand modern payment systems, analysts said that it would be hard to convince them to embrace such policy. Only few people in the informal market were said to be using ATM cards for transactions, hence, the adoption of this policy by the artisans remains a serious doubt.To this end, they will resort to keeping money in the house, which will be to the detriment of the banking sector and the economy.
Experts who spoke to BusinessWorld over the weekend said, implementing a policy like this means putting the cart before the horse, because it is obvious the system is not yet ripe for cashless transactions.
