…Depositors still paid in old banknotes
….Cash withdrawal limit takes off
By David Akinmola
The Central Bank of Nigeria (CBN) may have reversed the earlier directive stopping banks from loading automated teller machines (ATM) with higher banknotes, saying financial institutions are at liberty to pay in any denomination through the channels.
The apex bank had, as part of the original circular restricting cash holding, capped maximum denominations payable at ATMs at N200. It also pegged individuals’ and corporate entities’ weekly cash withdrawal limits at N100, 000 and N500, 000 respectively.
A follow-up notice upped the limits to N500, 000 and N5 million for individuals and corporate bodies respectively. It reviewed other items associated with the aggressive cashless policy enforcement but not the restriction on ATM payable denomination.
With the reversed policy coming into force, yesterday, customers expected the banks to commence dispensing N200 notes at ATM points. But in what was considered a contravention of the regulatory directive, virtually all ATMs in Lagos continued to dispense N1000 and N500, which the CBN sees as non-transactional but a store of value in its effort to reduce cash-based transactions.
The Director of Corporate Communication, CBN, Osita Nwanisobi, said the banks have not broken any rule as they are free to load the ATMs with any denominations they have as they are not under any restriction.
“They can load any denomination. If they have N1000, they should load it; if they have N500 they should load it. If they have N200, they should go ahead and load it,” Nwanisobi said.
The clarification suggests that commercial banks are not under an obligation to pay customers the scarce lower denominations through the ATMs. The majority of ATMs are configured on N1000 while a few pay N500.
A decade or two ago, a few ATMs were dispensing N200 and N100 banknotes but not anymore. The CBN directive was to compel banks, who are wary of the high cost of managing small denominations, to begin to re-circulate the small notes.
The CBN, in a media report, said banks are only authorised to dispense the new notes through the ATMs going forward. The report came amidst persistent scarcity of the redesigned naira in and outside banks.
But contrary to the CBN’s positions, ATMs continue to pay in the banks scheduled for demonetisation from the end of this month.
A few banks claimed their customers could now make withdrawals in the new notes at the ATMs. But checks showed that many of them are still paying old notes across the counter and via ATMs.
Checks throughout the weekend suggests that over 90 per cent of residents of Lagos, the country’s financial hub, are yet to spend or receive the new notes in exchange.
Three out of five people interviewed said they think Nigerians need more time to familiarise themselves with the new notes while one out of 10 respondents said they are not “bothered”.
The top reason given by those who are not bothered is their switch to an e-payment system. The decision of many others is informed by a lack of confidence in the centralised financial system and its regulation.
The National Assembly has queried the hurried demonetisation of the old notes with the Senate seeking an extension to June. It cited the need to reduce the possible hardship the return of old notes would have on Nigerians as a reason. Others said the policy is “too chaotic, muddled and insincere” to follow such a rigid enforcement route.
