In its determined effort to ensure the smooth take off cashless pilot scheme in Lagos State, the Central Bank of Nigeria (CBN) has embarked on sensitisation campaign to create more awareness.
The apex bank said that it recent plan to move from cash to cashless payment system would help to increase availability, reliability and security of electronic channels.
Deputy Director Currency Operation of the CBN, Albert Ikmseedum, who disclosed this at the town hall meeting yesterday at Ikeja, Lagos said that high usage of cash has resulted in a number of challenges across the system. He added that cash transaction had led to revenue leakages, inefficient treasury management due to nature of cash processing.
The deputy director said that the huge volume of cash transactions impose tremendous costs to the banking sector and, consequently, the customer, in terms of cash management, frequent printing of currency notes, currency sorting and cash movements. According to him, as the volume of cash in circulation (CIC) grows, so does the cost of cash management to the financial system increase on daily basis
Ikmseedum stated that the policy was aimed to achieve an environment where a higher and increasing proportion of transactions were carried out through Cheques and Electronic Payments (e-payments), in line with the global trend.
Stating the reasons for starting pilot scheme for cashless payment in Lagos State, Ikmseedum said that 50 per cent of money supply in the country came from the state.
He further pointed out that Lagos State was far ahead of other states in terms banking penetration and payment infrastructure , adding that the state accounted for 85 per cent of the point of sales transaction. He also said that 65 per cent of the money in circulation in the Nigerian economy was outside of the banking system, thus severely limiting the impact of the CBN’s efforts at price and economic stabilisation.
He said that the CBN had recognised the need to balance the objectives of meeting genuine currency transaction demands and combating speculative market behaviours that may negatively affect economic growth and stabilisation measures.
The CBN had earlier said that the new cash withdrawal policy will ensure that a larger proportion of currency in circulation is captured within the banking system, thereby enhancing the efficacy of monetary policy operations and economic stabilisation measures.