ON ISLAMIC BANKING AND CASHLESS SOCIETY
I hold the view that current policies of the Central Bank of Nigeria as they regard daily cash withdrawal limit and the introduction of the Islamic banking cannot guarantee Nigeria a position among the 20 most developed nations as projected to happen in the year 2020.
The key thing to focus on should be basic infrastructure like constant electricity supply, access to good and qualitative education, good road network, boosting our agricultural potentials and other mineral resources being neglected for oil.
On the issue of cash withdrawal limit, the CBN governor should get his facts right and stop misleading Nigerians as seem to be the case. I believe, as do many Nigerians, that contractors who will supply the machines are pushing this cashless economy thing. Sanusi Lamido, the CBN boss, has consistently said that many countries in the world, including some African countries, have long been practising cashless economy, which is why he is advocating it for Nigeria.
He should also know that banks in those places do not charge their customers if they withdraw more than a certain limit. Banks in Europe do not charge any one out side their normal COT[Cost of Transaction]. In The Netherlands for instance with PostBank the limit you can get on-the-spot is about 12,000 Euros which is about 2.5M naira and per a day cash limit varies from bank to bank.
The ABN-AMRO bank may choose to put their daily withdrawal limit at 4000 Euro and PostBank decides to make theirs at 12,000 Euros and so other banks. However, if you want more money you book the cash. You tell the banker, for example, that you will like to withdraw about 200,000 Euro or 50,000 Euro or 70,000 euro as the case may be, and the bank will tell you when to come back and pick up the cash without penalty.
This is unlike Sanusi who gives us example with those countries but has failed to do what they do. He is rather proposing to place extra charges on that kind of service. It is important that Nigerians get to know this and not rely on faulty information being put out by people at the central bank. Nobody charges you extra money in those places they use as example. All you are required to do is give the bank advance notice. Why does Sanusi want our own case to be different?
Also he should know that the countries that introduce the cashless systems have the right infrastructure to drive the system. Those countries in Europe or Africa Sanusi is talking about do not experience interrupted electricity supply and their telecommunication systems are working very well. The stated factors are very important for the cashless system to work well. The question is; How well are these things working in Nigeria?
This cashless economy thing will end up encouraging people to start keeping huge sums in their houses or office safe; a situation that will eventually truncate business for banks and encourage armed robbery.
Has Sanusi even considered the literacy level in Nigeria? Does he expect daily field labourers in construction sites to be paid through their account or does he expect their pay masters not to pay them because they must not take huge sums to the site?
Also, you can not tell a tomato seller or other market women to allow customers go with their goods and pay into their bank accounts later? He says that less than 10% of bank customers t withdraw 150,000 naira or above a day. If that is the case, he should also note that the people who withdraw 150,000 naira today may not be the same group that will withdraw over 150,000 naira the next day. You eventually see that almost 50% of the banks customers have the ability to make such withdrawal within a week.