Mobile money providers and the customers of organised banks have voiced their disagreement with the new limits on withdrawals issued by the Central Bank of Nigeria (CBN). They claim the bank intends to put them out of business due to the regulations.
The central bank capped weekly ATM cash withdrawals at N100,000 for individuals and N500,000 for businesses.
The CBN released that information yesterday in a circular to all deposit money banks (DMBs) and other financial institutions (OFIs).
The document was signed by Mr Haruna Mustafa, Director of CBN’s Banking Supervision Department.
It further noted that the limit for using ATMs daily has been set at N20,000, with a weekly maximum of N100,000.
Further, the CBN instructed DMBs and OFIs only to replenish ATMs with N200 notes and lower.
The Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has objected to the CBN’s cash dispensing policy, saying it will not fly and reducing business for mobile banking agents.
As the President of AMMBAN, Mr Olojo Victor commented on the new policy; he said, “They want to send us out of business.
“We are against this. This is not driving us forward. It is counter-productive. It does not represent what the CBN initially stood for regarding financial inclusion.
“It is a punishment for an average Nigerian. A bag of rice is N48,000. That means I can’t take cash if I want to go to the market. How will I do the transaction?
“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitised.
“There is no alternative, and you are taking out cash. You are running a cash-dominant economy as we speak.
“Cash remains king whether we like it or not. Go to the average market; we still have more cash transactions than PoS, and suddenly you want to seal cash without bringing alternatives and educating Nigerians on how the other options work.
“This will not fly. It is not suitable. It is a good idea but not at the right time.”
In contrast, Dr Uju Ogubunka, president of the Bank Customers Association of Nigeria, BCAN, praised the CBN for the move.
He did, however, point out that in a country where most people are market women who do not have access to electronic payment systems, such a strategy would be doomed to fail.
“What they are telling us is that we should use online banking more than we use cash. They are not stopping us from using the money in our accounts.
“They are saying that we should focus more on using electronic payments to do more transactions.
“But given the level of our people and even the use of mobile applications for banking transactions, it might be a big challenge.
“Like I was telling somebody earlier today, if I want to buy vegetables in the market, how do I transact that business without cash? It won’t be easy.
“We don’t expect to carry phones to transfer money to market women.
“There are areas you can apply electronic banking, and there are areas you cannot.”
Ogubunka added that the CBN’s strategy would hurt business during the holiday season because the banking industry does not have the necessary infrastructure to support it.
He then expressed concern over the potential for an uptick in fraudulent electronic payment channels and unsuccessful bank transactions.