The Bankers’ Committee has made known the intention of banks in the country to restrict physical cash withdrawals. Its sub-committee on payment systems and infrastructure proposed fixing the limit of cash withdrawals at ₦10,000 to Nigeria’s apex bank last week. The CBN’s response to this is being awaited, reports say.
There is an apparent link between the planned restriction and the sharp drop in deposits taken by banks, which declined by as much as ₦1.029 trillion between April 2015 and April 2016, according to a CBN report. Customers also struggle to service their loans- evidence perhaps, that the economy has hit a dry patch. The fall in the deposits has also been attributed to the introduction of the Treasury Single Account (TSA), which has kept federal government deposits away from them.
A possible reason for the proposal of this new measure by the banks is an attempt to encourage electronic payment in order to cut down on the use of bulk cash. But there is also the cost reduction side to it. This policy may make it unnecessary to visit banks often, and render some services given by bank workers irrelevant. There are fears that this might set off another wave of retrenchments in the banking industry.
It should be clear in the days that follow, whether this move births the changes Nigeria’s banks desire.