The Nigerian Senate has deliberated on the cash withdrawal limit policy announced by the Central Bank of Nigeria (CBN), offering three recommendations to the financial regulator.
Ripples Nigeria had previously reported that the Senate will meet on Wednesday to debate the report of the Committee on Banking, Insurance, and other Financial Institutions on the cash withdrawal policy.
The committee, led by Senator Uba Sani, had questioned two deputy governors of the CBN last week Thursday and was expected to submit the findings on Tuesday, however, the absence of Sani forced a postponement to December 14.
During the plenary on Wednesday, various Senators took turns to bear their minds on the new CBN policy and its impact on the people, most especially the rural areas.
Recall that the CBN had directed banks to limit cash withdrawals to N100,000 for individuals and N500,000 for businesses over the counter. Also, the daily maximum withdrawal from Point of Sale (PoS) and Auto Teller Machine (ATM) was put at N20,000.
Senators against CBN’s cash withdrawal policy
Addressing the policy, Senator Surajudeen Basiru and Senator Orji Kalu agreed that the threshold was unrealistic, and the amount should be increased to N500,000 for individuals.
“The threshold that had been set is unrealistic to have any robust and meaningful life to our people.” Senator Basiru said, adding that “As a Committee of the Senate, we ought to have been alerted with certain indices to come up with recommendations on what should be the adjustment. I am suggesting that the threshold should be N500,000 for individuals per week.”
Senator Kalu also told his colleagues during the debate that to support CBN’s Policy, the apex bank “should reconsider their decision and do N500,000 per day for individuals and N3,000,000 per day for Corporate. That will cover the fear of anybody.”
Majority of the Senators who spoke in the upper chamber were against the threshold and timing, with Senator Adamu Bulkachuwa stating that if the CBN policy is allowed to continue, “it will not be good for the country,” as “There are local people that are dependent on daily market as their means of survival and the farmers in my Constituency who engage on their farms need a lot of money and all of them are paid on daily basis,” Bulkachuwa said.
CBN cash withdrawal policy receives support
Senator Yusuf Yusuf and Senator Francis Alimekhena threw their weight behind the CBN policy, stating that Nigeria must embrace cashless system and can’t keep using the rural areas as a reason not to.
Alimekhena said the policy can be amended if it doesn’t work, “It is my opinion that we give this policy a chance. If we continue to talk about the rural area, we can never implement new policy.
“If it doesn’t work well then we can have an amendment,” he said, adding, “Let us try it and see what it is. For me, let us give this a policy a chance.”
Yusuf on the other hand if left to him, the highest denomination would be N100. The central bank had directed banks to only dispense N200 starting from January 9, 2023.
“Left to me, I would recommend the highest denomination to be N100. I so much support that we should go with the cashless policy in line with the present system that the CBN has adopted,” Yusuf said.
He also stated that “When we are talking about cashless, we should be mindful that about N3.3 trillion in circulation it’s only about a trillion naira that is in the bank. It is a danger to the country.”
Push back among senators for rural areas
Senator Francis Fadahunsi made a case for the rural areas after Senator Alimekhena said the country will fail to make policies if it keeps focusing on their impact on rural areas.
Fadahunsi argued that, “All of us here, including the House of Representatives, we all come from the rural areas and we know what it means. And now that we are sitting under the comfort of air conditioner, we forget that we have problems at home.”
Also, Senator Adamu Aliero stated, “More people in the rural areas don’t go to the bank and there is need for sensitization and enlightenment in order to make this kind of people embrace the banking system.”
Aliero explained, “We have 774 Local Governments and only about 60% of these Local Government Areas are covered by the bank. It is difficult to really force these people to embrace banking culture. I support the idea of cashless policy but we should do it with caution.”
Recommendations by Senators to CBN on cash withdrawal policy
Following arguments from both sides, the Senate resolved that the central bank should adjust the threshold due to the public outcry that trialed the cash withdrawal policy.
“the Central Bank of Nigeria should considerably adjust the withdrawal limits in response to public outcry on the policy;
“That the Committee should continue to embark on aggressive oversight of the Bank on its commitment to flexible adjustment of the withdrawal limit and periodically report outcome to the Senate;
“That the Senate should support the Bank on the continuous implementation of transformational payments and financial industry initiatives in line with its mandate in accordance with the CBN Act.”
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