•Apex bank warns banks, PoS Agents against collusion

•Traders hoard naira

The House of Representatives yesterday summoned the Minister of Finance and National Planning and Budget and Governor of the Central Bank of Nigeria (CBN) to explain why commercial banks are not paying customers over the counter and Automated Teller Machines (ATMs).

The House also urged the CBN to immediately commence proper monitoring and supervision of commercial banks’ activities daily to ascertain the extent of counter payment to customers.

The lawmakers mandated its Committees on Banking Regulations and Digital and Electronic Banking to invite the Minister and CBN Governor, while also calling on Point-of-Sales (POS) operators to stop selling naira notes. They called on the PoS operators to immediately remove excessive charges on transactions.

These resolutions followed the adoption of a motion titled, “Need to Curb the Sale of Naira Notes by the Point-of-Sales (POS) operators in Nigeria” moved by Hon. Mohammed Dan Abba Shehu.

The summon came as the apex bank issued a strong warning to banks and PoS operators suspected to engage in “inappropriate actions” and potential “collusion” affecting the availability of cash and smooth circulation of the naira.

The alleged collusive practices, currently under investigation by the CBN, were believed to be contributing to the ongoing cash crunch experienced by Nigerians. The apex bank has assured the public that it will not tolerate such behavior and will mete out “relevant sanctions” to any parties found culpable.

In a press release issued yesterday and signed by CBN spokesperson, Mrs. Hakama Sidi-Ali, the apex bank urged both banks and PoS operators to immediately cease any activities disrupting the free flow of cash in the economy, especially the practice of “hoarding” of naira notes.

The CBN encouraged Nigerians to embrace alternative payment channels beyond cash, promoting a more efficient and digital financial system.

According to the apex bank, to facilitate this shift, the public should report any instances of unauthorised cash restrictions or suspicious activities by banks or PoS agents directly at any CBN branch nationwide or through designated online platform.

A high-level source at the CBN had linked some staff of commercial banks and farmers as major contributors to the cash crisis.

According to a high-level source within the apex bank, who spoke to The Nation on condition of anonymity, an internal investigation unearthed a web of nefarious practices fueled by both greed and fear.

Shockingly, the investigation revealed that some commercial bank staff are actively diverting cash meant for customers to their own personal PoS machines. This insider scheme, fueled by the ownership of PoS businesses by bank employees, effectively siphons money away from legitimate channels, exacerbating the cash shortage faced by Nigerians.

Adding to the challenge, the truncated new naira policy triggered anxiety among some citizens, prompting them to hoard cash rather than deposit it in banks. Similarly, the end-of-year harvest season sees farmers, traditionally accustomed to cash transactions, holding onto their earnings outside the formal banking system.

While official withdrawal limits allow for sizeable cash withdrawals, POS operators continue to struggle for access. The source revealed that banks prioritize cash for their own ATMs and internal needs, leaving POS operators high and dry. This creates a bottleneck, forcing desperate operators to seek alternative, often expensive, sources of cash like fuel stations and shops.

The problem deepens with reports of individuals using multiple cards to withdraw large sums from ATMs, particularly at night, depleting available cash quickly. Banks, in response, adjust loading frequencies, further tightening the tap for the average customer. The issue is further compounded by the circulation of “unusable cash,” damaged or unfit for ATM use.

Commercial banks in Umuahia, the Abia State capital and their counterparts in Aba, the commercial nerve of the state have further reduced their customers cash withdrawal limits.

Our correspondent who monitored the current development in the state reports that most commercial banks as at Wednesday, were dispensing N20,000 daily limit to customers using their Automated Teller Machines (ATMs), while they pay same amount to customers through the counter.

Customers of other commercial banks were subjected to daily withdrawal of N10,000 of N5,000 per withdrawal.

Our correspondent reported that things improved yesterday as most of them now pay N50,000 across counter to their customers, while their ATMs still dispense daily withdrawal of N20,000 for bank’s customers while customers of various banks were limited to N10,000 withdrawal on two tranche.

One of the commercial banks in Abia State Polytechnic, Aba de-selected other options leaving their ATM users with the N5,000 option alone; for both customers and other ATM user.

One of the commercial bank staff who spoke to our correspondent on anonymity said that the decision to start paying their customers N50,000 because they were able to get more money from the CBN’s office in Umuahia, the state capital.

According to the source, the bank dispenses money depending on the amount of money they received from the CBN.

The Nation investigation revealed that operators of Point Of Sale (POS) outlets now buy money from traders in various markets who now prefer to keep their money in their shops than taking them to the bank.

A trader who gave his name simply as Chukwuemeka said that their reason for keeping cash in their shops is to avoid the limited amount of money that banks give them.

Chukwuemeka who stated that they also receive bank transfer from their customers or shoppers that visit their shops, said it was optional for any trader to stockpile money for POS operators.

This is even as he added that he has a POS stand where he supplies the cash he made from his daily with little charge above what they charge in the time past.

A resident of Aba who just returned from a journey in Okigwe, said she paid as much as N6,000 for N20,000 by a POS operator. (The Guardian)

Update news