Monday , 21 October 2019
Latest News
Home » Breaking News / Latest News » House asks CBN to stop charges on deposit plan
House asks CBN to stop charges on deposit plan

House asks CBN to stop charges on deposit plan

The House of Representatives yesterday urged the Central Bank of Nigeria (CBN) to stop implementation of the cashless policy on deposits and withdrawals by the Deposit Money Banks (DMBs). This followed the adoption of the prayers of a motion by Benjamin Okezie Kalu, by the House.
According to the lawmaker, the extra charges policy on deposits and withdrawals must be suspended.
The Green Chamber also mandated its Committee on Banking and Currency “to interface with the CBN to ascertain the propriety, relevance and the actual need for the implementation of that aspect of the cashless policy at this time considering the prevailing economic situation of the country.”
The committee has a mandate to report back to the House within four weeks for further legislative input.
The motion was titled: “Need to suspend the implementation of the cashless policy on deposits by the CBN.
Moving the notion, Kalu said: “We are aware that the CBN introduced a policy on cash-based transactions which imposes a cash handling charge on daily cash withdrawals for individuals and corporate bodies.
“We are further aware that the policy on cash-based transactions (withdrawals) in bank, was aimed at reducing and not eliminating the amount of physical cash (coins and notes) circulating in the economy, and encouraging more electronic-based transactions (payments for goods, services, transfers, etc);
“Note that the cash policy was introduced for a number of key reasons, including the need to drive development and modernisation of our payment system in line with Nigeria’s Vision 2020 goal of being amongst the top 20 economies by the year 2020, to reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach.
“Note also that that a variety of benefits are expected to be derived by various stakeholders from an increased utilisation of e-payment systems which include: increased convenience, more service options, reduced risk of cash-related crimes, cheaper access to (out-of-branch) banking services, access to credit and financial inclusion for consumers; faster access to capital, reduced revenue leakage and reduced cash handling costs for corporations and increased tax collections, greater financial inclusion, increased economic development for government;
“We are aware that the CBN has signaled the implementation of a policy which would signal the imposition of charges on deposits in addition to already existing charges on withdrawals.
“We are informed that the charges, which took effect from Wednesday, September 18, 2019, will attract three per cent processing fees for withdrawals and two per cent processing fees for lodgments for individual accounts; five per cent processing for corporate accounts;
“We are informed again that the charge on deposits would apply in Lagos, Ogun, Kano, Abia, Anambra and Rivers states as well as the Federal Capital Territory; and that the nationwide implementation would take effect from March 31, 2020.”
He expressed worry that the implementation of the policy so far, has led to significant decrease in deposit mobilisation and credit extension by the DMBs
Kalu said: “We are deeply worried that the implementation of cashless policy on withdrawals has negative impacts on micro, mini, small, and medium enterprises which are clearly the engine room for growth of the economy and employment generation, thereby throwing many of them out of business and sending more Nigerians into poverty and forcing more traders and micro investors to carry cash about with its attendant security challenges.
“While the impact of the cashless policy on withdrawals is still starring us all in the face as well as other numerous charges by banks on businesses, the CBN deemed it necessary to impose the implementation of cashless policy on deposits and withdrawals without due consultations with all shades of stakeholders who will be impacted by the policy.”
The lawmaker said he was deeply concerned that the apex “did not consider the people as the prime, important and indeed the centre piece of policy-making, even as Section 14(2)(b) of the Constitution of the Federal Republic of Nigeria, 1999 (As Altered) provides for the security and welfare of the people is the primary purpose of government.”
The House urged “the CBN to suspend the implementation of the cashless policy on deposits which has taken effect from September 18, until appropriate and extensive consultation is concluded.”

About Demola Abimboye