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National Tribune

Flagging The Conscience Of Truth

Business Transactions Stall as Cash Squeeze Intensifies

ByWeb Manager

Feb 1, 2023

Amid cash scarcity, thousands of households are facing difficulties with failed electronic transfers and long waits at ATMs. Bank tellers have suspended operations due to the risk of sanctions from the Central Bank of Nigeria, leaving no cash to dispense. However, after a standoff with the House of Representatives, the CBN Governor, Godwin Emefiele, assured that old naira notes can still be deposited with the apex bank after the February 10 deadline for the naira swap policy, as stipulated in the CBN Act. The CBN boss pledged to adhere to sections 20, sub-sections 3, 4, and 5 of the CBN Act.

Emefiele, accompanied by top CBN officials, pledged to ensure fair and transparent distribution of new naira notes to all banking locations. He expressed disappointment with commercial banks hoarding the new notes and assured the lawmakers that he met with deposit bank leaders to address the issue and improve the availability of new notes in ATMs. CBN is working with the EFCC, ICPC, NFIU, and other security agencies to smoothly implement the naira swap policy. Doguwa praised the naira swap policy as well-intended but misunderstood due to communication gaps between CBN and the National Assembly. He appreciated Emefiele’s commitment to the CBN Act regarding the acceptability of old naira notes after the deadline.

Doguwa directed Emefiele to submit weekly reports on the distribution of new notes versus the receipt of old notes by commercial banks and other banking locations. Soli requested that CBN increase the N20,000 withdrawal limit of new notes at ATMs. CBN uncovered mismanagement of N4 million in new notes by a commercial bank in Ogun and blamed commercial banks for sabotaging their efforts to make new notes available. CBN’s Deputy Director of Banking Supervision, Makinde, led a monitoring team in Ogun to ensure compliance with CBN directives. CBN clarified that old N200, N500, and N1,000 notes will be accepted after February 10 but will no longer be legal tender and can only be redeemed at CBN. The Director of CBN’s Corporate Communications, Nwanisobi, explained that acceptance is subject to conditions, but the duration was not stated.

Due to the shortage of cash, people are seeking alternatives, but with limited options. Point of Sale (PoS) operators, who previously charged an average of N200 for an N10,000 withdrawal, have now increased their fees to 10% and limit withdrawals to as low as N2,000 per person. This has affected businesses, especially small enterprises, and led to a decrease in electronic payment adoption, with some businesses collecting personal information from customers.

Failed electronic transactions have also become a problem, causing frustration among customers and businesses alike. Bank customer service workers are receiving numerous complaints about failed transfers that have not been reversed. This rigid payment system may have negative consequences for business performance and productivity if these challenges persist.

Nigerians are taking to social media to voice their anger and call for a review of the policy. Some are even calling on the CBN Governor, Godwin Emefiele, to act quickly to save the economy and restore stability in the monetary system. The CBN has explained that banknotes that cease to be legal tender can only be redeemed by the central bank, but with conditions and processes that may be prescribed. After the February 10 deadline, old N200, N500, and N1,000 notes can no longer be used for transactions, and can only be redeemed for their face value at the CBN. The duration for the acceptance of these notes after the deadline has not been stated.

A group of Civil Society Organizations (CSOs) has accused commercial banks and their employees of stockpiling the new naira banknotes to undermine the currency exchange policy. The Coalition of Civil Society on Good Governance (CCSGG), led by its President, Bassey Etuk, spoke out about the situation at a rally in Lagos and stated that certain individuals were working to sabotage the implementation of the policy. Meanwhile, the former Secretary to the Government of the Federation and Minister of Finance, Oba Olu Falae, called the withdrawal of the old banknotes and the introduction of the new ones “ill-timed.” He expressed concern that the scarcity of funds may disrupt the upcoming elections and suggested that the Central Bank of Nigeria could have improved the timing and sequence of the currency exchange.

Source: Guardian News

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