The Central Bank of Nigeria (CBN) on Friday said it was going ahead with its decision to impose charges on cash deposits and withdrawals in banks in excess of N500,000 for individuals and N3 million for corporate entities.
Although the policy became effective on Wednesday, the House of Representatives on Thursday told the apex bank through a resolution to suspend it.
Speaking at the bi-quarterly Monetary Policy Committee (MPC) meeting in Abuja, the governor said he was sympathetic to the pains Nigerians were subjected to with regards to the new programmes, even as he appealed for total support and understanding.
The CBN governor assured that the citizens will be best for it in no distant time.
He said: “The federal government has to fend for everyone and has to generate funds for expenditure. We are saying debt stock is too high. Debt service ratios are also too high. This means interest rate is very high compared to revenue. It means revenue we generate is too low.
“So, if it must raise revenue without heavy borrowing, then it calls to rational that VAT moves from 5-7.5%. Government has its responsibilities. And even with our VAT at 7.5%, it’s still one of the lowest, if not the lowest in the world. I appeal to Nigerians to show understanding. Let us look at the positive side of this. Government needs to meet its obligations, ensure GDP growth, raise revenue, carry out capital projects, tackle infrastructure.”
On the newly-introduced charges in its effort to complete the cashless policy cycle, the CBN governor begged: “I sympathize with the banking public and inconvenience it causes them. But this cashless policy is not new. It was first launched in 2012 after several engagements with all relevant stakeholders. Deposit and withdrawal charges above certain threshold has always been in place since 2012.
“Withdrawal charges have always been there but we only introduced deposit charges that was halted in 2014.
“We wanted those who kept their money outside to come in. But over five years now, we feel all those who kept cash in pillows and mattresses will be ready to bring them into the bank. Besides, it only affects six states for now. By March 2020, it’ll be for all Nigerians”, he stated.
Explaining the benefits of cashless policy, Emefiele said it will reduce ransom payment, advanced fee fraud and ultimately improve transparency and accountability.
He further revealed that many of the Micro Small and Medium Enterprises (MSMEs) have various options for collecting legitimate payment for goods and services rendered.
“There’s PoS, USSD, e-banking etc. Really, it’s in public interest to go cashless to reduce charges passed on to the customers. Again, since the cashless policy commenced, electronic transactions have increased by 4,692% and has hit N2.3 trillion as at the end of 2018”.