• Ahead Christmas withdrawal limits spark public frustration
Frustration is sweeping across banking halls and automated teller machine (ATM) points in the country as cash crunch worsens with Christmas only 17 days away.
Although the Central Bank of Nigeria (CBN) says diligent efforts are underway to improve access to cash, the apex bank yesterday raised the alarm over proliferation of counterfeit banknotes, particularly in higher denominations.
The acting Director Corporate Communications of the CBN, Mrs. Sidi Ali Hakama, said the fake banknotes were being used in transactions at food markets and commercial hubs in the major cities.
The CBN warned all Deposit Money Banks, Financial Houses, Bureau de Change, and the public at large to step up vigilance and take the necessary precautionary measures to stem the acceptance and circulation of counterfeit currency.
To underscore the seriousness of the matter, the apex bank drew attention to Section 20(4) of the CBN Act (2007), as amended, which stipulates stringent penalties, including imprisonment for no less than five years, for individuals found guilty of falsifying, making, or circulating any banknote or coin issued by the CBN as legal tender in Nigeria.
The CBN said it remained actively engaged in collaborative efforts with pertinent security and financial agencies to seize counterfeit Naira notes, apprehend perpetrators, and ensure legal prosecution.
To mitigate the risk associated with counterfeit banknotes, the general public has been advised to adopt alternative payment modes such as eChannels for their day-to-day transactions.
It also asked the public to promptly report any suspected cases of counterfeit currency possession to the nearest police station, local branch of the CBN or via contactcbn@cbn.gov.ng.
Withdrawal limits spark customers’ frustration
Customers who daily throng the banks and ATMs for cash withdrawal ahead of Christmas and New Year are lamenting their inability to access as much cash as they want.
The banks say they can only dispense a maximum of between N50000 and N100000 across the counter daily.
They encourage customers to use internet banking or ATC card.
However, most ATMs hardly dispensed cash, according to the investigation conducted by our correspondents.
The few ATMs found dispensing cash had long queues of customers.
“This is simply unacceptable,” exclaimed Mr. Adebayo, a frustrated bank customer who had been waiting in line for a long time in Abuja.
“How am I supposed to run my business and pay my bills with only N40,000 per day? This is a disaster for the economy and for the ordinary people.”
Amina, a small business owner in Abuja, echoed the same sentiment. “My business relies heavily on cash transactions, and these new limits are crippling me,” she lamented.
“I am struggling to pay my suppliers and employees, and I fear that I may be forced to close my doors if this continues.”
Jos business operators hoard cash
Many business operators in Jos, the Plateau State capital, have refrained from banking sales cash for now to avoid their experience in the weeks leading to the February presidential election.
Investigation also showed that Point of Sales (POS) operators have been buying cash from petrol station attendants to be able to keep their business running.
“We have no option but to approach petrol station attendants to source for cash that would enable us serve our customers during the Christmas and New Year festivals,” a POS operator in Bukuru area of the city said.
The POS operators have accordingly increased their charges by 200 per cent.
Another POS operator in the city, Alex Marku , said: “Our business is becoming more difficult due to the inability of our banks to give us cash.”
A bank customer, Martha John, said: “We suffer to withdraw cash from banks in the state. Most of them have capped daily withdrawal and ATMs can only dispense between N20,000 and N30,000, where available.
Complaints galore by depositors in Port Harcourt
The cash crunch has hit Rivers State following the decision of commercial banks in the state to ration cash among their customers.
While some banks are paying a maximum of N10,000, others dispense up to N50,000 per withdrawal.
A customer, who identified himself simply as Stanley, complained that he could only access N10,000 cash from his account.
“They paid me only N10,000 from my account. How can they limit me to only N10,000 cash?” he wondered.
Another customer said he was able to withdraw only N50,000 from his account, adding that it was a herculean task before he could withdraw the money.
“I got only N50,000 cash. Before I could access the money, I spent over an hour because of the queue,” he said.
A Point of Sale (POS) operator, who identified herself simply as Blessing, said she could only collect N10,000 after spending an hour on queue.
“They told us there is no cash. The queue was long and I was able to collect N10,000.
“At the secretariat where I operate, there are 10 Automated Teller Machines (ATMs), only one was dispensing cash. But the queue was also long,” he said.
It’s business as usual in Enugu
The situation is however different in Enugu where customers get as much cash as they desire across the counter and the ATMs.
Investigation showed that ATMs and the banking halls were operating optimally in the state.
As of Thursday when The Nation visited some of the banks in Enugu and made enquiries in Nsukka and Ninth Mile respectively, it was the same situation.
A customer in one of the banks, Nebechi Ede, said he did not encounter any form of difficulty in withdrawing from the ATM, unlike what happened before.
“I didn’t have any problem withdrawing money from the ATM. As you can see, there are not many people in there, meaning that there is nothing like cash scarcity here.
“Maybe it’s because people no longer have savings in the bank as a result of the current economic situation in the country. Who knows”, he said.
A banker, who did not want his name mentioned, told The Nation that there was no form of tension “at least in our branch here”.
“But I know that if there is cash scarcity elsewhere, we will get the signal by the number of cash withdrawals per day,” she said.
She attributed the situation to the quick embrace of the online banking which she said many residents had since adopted.
“Except businesses that deal directly with cash, most businesses have now adopted the online method of banking, and I think that may be the reason we are not experiencing the scarcity of cash as being reported in Lagos and some cities in the country,” she said.
Financial analysts say the cash crunch, coming so soon after the new naira notes scarcity early this year, portends danger for the economy.
They warn of a possible slowdown in economic activity, particularly in sectors heavily reliant on cash transactions. Furthermore, the impact on small and medium-sized enterprises (SMEs) could be devastating, potentially hindering their growth and contributing to job losses.
“This is a serious situation with far-reaching implications,” said Prof. Olabode, a renowned economist.
“The CBN needs to act swiftly and decisively to address the cash crunch before it inflicts further damage on the economy.”
While banks have implemented the new withdrawal limits in compliance with the CBN’s directives, some officials have expressed concerns about the potential impact on their operations and customer relationships.
They acknowledge the public frustration and are urging the CBN to reconsider the limits and provide support to ensure adequate cash availability.
“We understand the challenges that our customers are facing,” a senior bank official in Abuja said.
“We are working closely with the CBN to find solutions that address the cash crunch while ensuring the stability of the banking system.”
The CBN has already outlined a multi-pronged approach to address the cash shortage while anticipating a significant increase in deposits next month, as businesses resume operations after the holiday season. This influx of cash is expected to replenish reserves and improve accessibility.
The CBN is also actively engaging with commercial banks to strategise solutions for efficient distribution of new notes. Additionally, a nationwide awareness campaign will be launched to educate the public about the new currency policy and alleviate anxieties.
It said the situation is temporary and urged Nigerians to exercise patience and cooperate with it as it navigates this period of transition.
