Despite the restoration of punitive charges for cash deposits and withdrawal from banks above certain thresholds in major commercial centres of the country, the latest data by the Central Bank of Nigeria CBN shows that currency-in-circulation leaped by N145.999bn at the end of November, when compared to the previous month.
According to the apex bank, as of November 29, 2019, currency outside of the nation’s formal banking system stood at N2.201tr, after rising 7.10% over the N2.055tr recorded at the end of October.
The latest level is the highest since March when currency-in-circulation when it stood N2.153tr. It is however just a little shy of the year-high level of N2.241tr.
Year-to-date, however, the November level represents, it dropped by N127.761bn or 5.48% from N2.329tr on December 31, 2018; while year-on-year, currency-in-circulation rose by N101.816bn or 4.84% from N2.10tr on November 30, 2018.
Implementation of the cashless policy, which was earlier suspended, was resumed
Recall that that the CBN, last year approved bank charges on deposits and withdrawals above the set threshold in six states with commercial cities across the country from Wednesday, September 18, 2019.
A circular by Sam Okojere, CBN’s Director, Payments System Management Department, titled “Re: Implementation of the cashless policy,” listed the states as Lagos, Ogun, Kano, Abia, Anambra, and the Rivers States, as well as the Federal Capital Territory (FCT), Abuja.
The move which is part of efforts to migrate more people onto electronic payment platforms is expected to drastically reduce the cost of currency management in the country, with withdrawals of over N500,000 for individual accounts attracting 3% processing fees; and 2% for lodgments of similar amounts with effect from.
According to a circular to all deposit money bank (DMBs), which also announced the commencement of the charges on deposits in addition to already existing charges on withdrawals, corporate accounts will, however, attract 5% processing fees for withdrawals and 3% for lodgments of amounts above N3,000,000 from that date.
Nationwide implementation of the cashless policy, the circular noted, will take effect from March 31, 2020.