The Central Bank of Nigeria has insisted on the implementation of its new cashless policy despite lawmakers’ call to the CBN to suspend the policy.

The CBN had earlier said that nationwide implementation of the cashless policy will take effect from March 31, 2020.

According to the policy, a 3 percent processing fee will be charged for withdrawals of amounts above N500,000 for individual accounts, while 2 percent will be charged for deposits.

For corporate accounts, a processing fee of 5 percent will be charged for withdrawals, and 3 percent for deposits of amounts above N3 million.

Reacting to the policy, the Federal House of Representatives in its plenary session on Thursday, September 19, 2019, asked the apex bank to suspend the implementation of the cashless policy.

But the governor of the apex bank, Mr Godwin Emefiele, while briefing journalists on Friday September 20, 2019, said, implementation of the policy would continue as announced by the CBN. 

Debunking the claims that many Nigerians would suffer the negative impact of the policy, Emefiele said only about five to ten percent of bank customers would be affected by the policy.

The CBN governor added that a payment system that encourages the use of non-cash channels was desirable, if Nigeria wishes to compete with the economy of developed countries. 

He said the policy was first introduce in 2012, adding that a lot of stakeholder engagements were done to sensitise Nigerians on its benefits.

According to him, the cashless policy was suspended in 2014 to allow more payment channels to be developed by Deposit Money Banks.

Emefiele explained that since the policy was suspended, there has been a continuous increase in currency management cost every year.

He said, “Since the policy was first launched, currency management costs have continued to increase year-on-year at an average annual growth rate of 33 per cent.

“Notwithstanding, electronic transactions have increased within the economy. We have provided alternative channels and people have embraced it.

“This is a strategic timing of these actions because on Monday, September 23rd, the mutual evaluation by GIABA (Inter-governmental Action Group Against Money Laundering in West Africa) on the country’s anti-money laundry and CFT (Combating Financing of Terrorism) regime will begin.

“Passing the mutual evaluation positions Nigeria as a safe and credible destination for financial transactions across the world.

“GIABA will be in Nigeria to access the rate at which Nigeria has embraced anti-money laundry and CFT regime. It is important that we display and show to them that Nigeria is indeed in conformity with their practices as enshrined in their anti-money laundry and CFA laws.”

The CBN boss also maintained that credit cards owned by Nigerians might not be used abroad if the apex bank did not implement the policy.

Speaking on the recent increase on the Value Added Tax, Emefiele said the MPC supported the decision of the Federal Government to increase the rate from five per cent to 7.5 per cent.

He said increase in tax is the best way to shore up revenue as Nigeria has one of the lowest VAT rate in the world.

“The MPC endorsed the increase in the VAT rate from five per cent to 7.5 per cent. The government has the responsibility to fend for everybody.

“In fending for everybody means that it has to spend money to provide infrastructure — roads, airports, different things that will improve the lives of its people.

“There are two ways through which government can fund these expenditures. It’s either it raises revenue or goes for debt. You all know that the government has been criticised that the debt stock is too high.

“You all know that government debt service ratios are too high. What that means is that your revenue is small because if your revenue is large, then your debt service ratios will be lower,” he said.

Emefiele said while the decision to increase VAT might be painful to Nigerians, the benefit of such move far outweighed the cost, Punch reports.