Some finance experts have said that the plan by the Central Bank of Nigeria (CBN) to kick-off its cashless society pilot scheme in Lagos State might not be easy as it could slow down business activities in the state.
According to them, one of the major challenges of the policy was that people would be discouraged from depositing money in the banks because of problems of adaptation.
They however, said that although some businessmen who used large volume of cash for business transaction might adopt a ‘wait and see’ attitude, they would in future return their money gradually back to the banks after the policy has stabilised.
Commenting on the plan of CBN to test-run its cash transaction limit policy in Lagos, managing director of H.J Trust and Investment, Mr. Harison Owoh, said that though the state was the financial hub centre of the country, there was need for the apex bank to give further explanation regarding the issue of cumulative individual’s daily withdrawal of N150,000.
He said that the CBN was expected to educate people on the policy before test-running it in the state.
Insisting that there was need for the apex bank to enlighten people on the individual cash limit cumulative withdrawal policy, he said “a situation where Mr A is owing three people N150,000 each and he decided to issue different cheques of the same amount to them, will bank honour the three cheques or will it accept one and reject others.”
He further stated that despite the fact that it would be difficult for people to accept change, the adoption of cashless society in Lagos State to some extent would reduce high rate of crime in the system.
Corroborating with Owoh’s view, a media consultant, Mr. James Eze, said that the new policy would impose serious challenge to every sector of the economy in Lagos at inception because the state has large numbers of traders who must necessarily carryout transactions with cash.
Expressing optimism that the cash withdrawal policy would be useful in the long run in Lagos,Eze said:“CBN has to enlighten banking public on the policy that affects them directly, especially as regards the issue of deposit and withdrawal of money from banks.”
In his own contribution, chief executive officer, Lambert Securities Limited, David Andorin, however, said “the policy is a right step in the right direction, because despite the fact that Nigeria is a cash-based economy, the move is a conscious step towards moving the economy to a cashless system.
It is a means to fight money laundering, insecurity and corruption.
He urged the CBN to work very hard on infrastructure to ensure the success of the policy.
According to him: “Initially, it will be difficult, but eventually, people will have no alternative but to comply.”
He noted for instance that stockbrokerage firms have since stopped receiving cash payments for share purchases, as clients had to pay through the bank.
However, a banker who pleaded anonymity said that before the policy would be effective, the apex bank must put in place infrastructure that would enable people accept the use of electronic payment channels.
He explained that in a situation where CBN failed to do so, it meant that depositors would resort to self banking and keeping money in personal safes.
“The policy if it is implemented without putting infrastructure in place, is something that can stop people from going to the bank to deposit money,” he added.
?
He further said that the CBN needed to embark on campaign to educate people on the benefit of the policy especially in Lagos which financial hub centre of the country.
He stated that once the pilot scheme fail in Lagos it would not succeed in any other place because Lagos State is the centre of nation’s economy.
It could be recalled that the Federal Executive Council (FEC) yesterday approved the Central Bank of Nigeria’s (CBN’s) cashless economy proposal, seeking to use
Lagos to test run the policy. The FEC added that the policy would help reduce cost of running banks by 30 per cent.
Maku said, “CBN has decided to start the cashless economy in Lagos, using Lagos as the hub and has taken in partnership with the Governor of Lagos State, Mr. Babatunde Fashola (SAN) and in few months to come Lagos will move swiftly into e-banking and there is also the initiative to introduce mobile banking across the country so that with our telecoms we can use them to open our bank account, transfer money, receive payment or withdrawals.”
?