Following intervention by the National Assembly, theCentral Bank of Nigeria (CBN)Governor, Godwin Emefiele, last week Thursdayclarified that the newpolicy oncash withdrawallimits wassubject to review. That is reassuring given the controversy that has been generated by the new rules.While we do not intend to underplaythehuge advantages inherent in acashlessenvironment that willhelpincrease transparency in financial dealings and reduce crimes such as ransom payment,extortion, and vote-buying during elections, we nonetheless still urgetheCBNto err ontheside of caution.

Under the new dispensation, theapex bankhasrestricted the maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week to N100, 000 and N500, 000 respectively.Withdrawalsabove the thresholds would attract processing fees of five and 10 per cent respectively for individuals and corporate entities.This is seen as asubterranean move to further short-change bank customers who are already overburdened by sundry charges ranging from stamp duty toAutomated Teller Machine (ATM)maintenance fees.In addition, third party cheques above N50, 000 shall not be eligible for OTC payment while extant limitof N10 million on clearing cheques remains.The new regime further pegged the maximum cash withdrawal per week via ATM at N100, 000 subject to a maximum of N20, 000 cash withdrawal per day.

First, we must first admit that the cashless policy is not new,having been inaugurated in 2012 whiletheimplementation began in 2014 with charges.Introduced to reducetheamount of physical cash used in business transactions intheeconomy as well as encourage more electronic-based transactions,we have always endorsed the policy, hoping itwould helpfacilitate economic development, reducethecost of banking services,and improvetheeffectiveness of monetarypolicyin Nigeria.Besides, the CBN had on 17thSeptember2019 directed allDeposit Money Banks (DMBs) to immediately commenceimplementationin six pilot states acrossthecountry, including Lagos, Ogun, Kano, Abia, Anambra, and Rivers States, as well astheFederal Capital Territory (FCT).Theapex bank statedat the timethatthenationwide implementationof the cashless policywouldcommence on31stMarch 2020.

Granted that the CBN may be trying to complete this process, but it shouldalso be aware ofthechallenges.There isgenuine fear thatthepolicycould underminefinancial inclusionby dissuading people from embracing banking services.Yes, it is true that many Nigerians have already embraced electronic channels and online transaction in marketplaces. But despite what can be seen astheearly successes ofthecashlesspolicy, illiteracy, limited knowledge of computing/use of internet and lack of trust,etc., still constitute problems. Many people are not conversant with using electronic channels andthereby breach security by givingtheir PINs to strangers to transact ontheir behalf. In additionto the foregoing, infrastructural challenges persist, internet access remains erratic, ATMs debit accounts without dispensing cash and merchants’ apathy to using POS terminals remain due to a loss in tips.

While we concede that the new rules are consistent with the CBN cashless policyto promote a credibleandefficient payment system,theinterest of bank depositors must be paramount.There are several issues that the CBN management must factor in during implementation. The informal sector in Nigeria is mostly unbanked and cash-dependent, inflation has eroded the purchasing power of the Naira, necessitating larger cash requirements and the new rules contain no incentives for encouraging more people to open bank accounts. With 133 million Nigerians already in the poverty bracket, we cannot afford a further complication of their challenges.In trying to solve a problem, theCBNshould be careful not to create a bigger one.