The policy was aimed at reducing cashbased transactions. In a circular released on friday, the apex bank instructed banks to revert to old. Cbn reintroduces cashless charges on bank deposits. The bank said there are other options to receive and pay out money above. Cashless nigeria faq on cashless nigeria point of sale pos guidelines. Effect of cashless banking on unemployment rate in nigeria. Implementation of the cashless policy central bank of nigeria. The cbn said the new cashless policy was introduced for a number of key reasons. Get free research paper on the impact of the cbn cashless policy on the development of the banking sector of nigeria project topics and materials in nigeria. The cashless policy aims to curb some of the negative consequences associated with the. Frequently asked questions on cashless nigeria central bank of. Further to our circular ref bpsdirigencir04004 we write to inform all deposit money. In july, 20, the policy was extended to six other states.
Pdf returns of the cashless policy in nigeria mpho. Download this complete banking and finance project material titled. In the light of the foregoing, the introduction of the cashless policy by the central bank of nigeria cbn is applauded as a policy package with bountiful benefits as it seeks to encourage cashless payments, thereby arresting some of these cash related vices. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. The policy, intended to reduce the use of cash, is in fact a package of measures, as summarised in box 1 below, with three key stated objectives. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000.
The introduction of the cashless policy in march 2012 aimed to drive development and advance payment systems in nigeria. Secondary data came from cbn statistical bulletins while the primary data is the result of a survey of 170 customers of seven commercial banks. It was supposed to go nationwide on july 1, 2014, but that step has been on and off as at june, 2019. Training of staff on the cashless policy, in order to provide answers to enquiries and handle issuescustomers complaints, as well as provide advice on the policy. This is approved for students in accountancy, business, computer science, economics, engineering, arts. Cashless policy was introduced implemented in nigeria in the year 2012 by the central bank of nigeria. The central bank of nigeria cbn has suspended its earlier directive on the implementation of cashless policy. In addition, the policy aimed to reduce costs related to banking and facilitate the progression of monetary policy decisions and. The central bank of nigeria cbn, in line with its cashless policy, has reintroduced charges on cash deposits and withdrawals in banks.
Central bank of nigeria the cashless nigeria project. Given the policy s objectives, the paper xrayed the associated benefits of the policy. In 2012, the central bank of nigeria cbn introduced a cashless policy, on a pilot basis, in lagos state. Cashless policy and banks profitability in nigeria osazevbaru, henry osahon ph. This is known to have several negative implications for an economy, which is the reason why the central bank of nigeria 2011 introduced the cashless policy in 2011 with the hope of curtailing. Pdf this paper studied the impact of cashless policy in nigeria. The study presented useful recommendations for policy makers.
A cashless economy is one where purchases and transactions are done mainly by electronic means and seldom by cash. The impact of central bank of nigeria cashless policy in nigeria. The cashless policy of the cbn is designated to provide mobile payment services, breakdown the traditional barriers hindering financial inclusion of millions of. What does the ns ash less policy mean for financial. Pdf evaluating nigeria cashless policy implementation. Apr 22, oyetunji abioye the central bank of nigeria on friday announced the immediate suspension of the implementation of the cashless nigeria.
The central bank of nigeria cbn has introduced a new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals. The cbn had given a threemonth moratorium for the full implementation of charges to customers who withdraw or deposit money higher that what was stipulated in the cashless policy document. Apr 21, the cbn in february announced its plan to extend the cashless policy to all the remaining states of the federation by oct. The effectiveness and challenges of the cbn cashless policy on rural business development a case study of zenith bank plc with abstract, chapter 15, references and questionnaire. The central bank of nigeria cbn cashless policy and the. Full text of cbn circular limiting cash withdrawals. According to central bank of nigeria cbn, 2011 the policy is expected to reduce cost incurred in maintaining cashbased economy by 90% upon its full implementation in nigeria. Little wonder why the central bank of nigeria recently introduced a cashless policy. Its broad objective was to determine to what extent the microentrepreneurs in the informal sector are financially carried along with the ongoing cbn cashless economy policy. Section 5 and 6 highlights the expected benefits and the challenges facing the cashless policy in nigeria and section 7 discusses the policy implications of cashless banking in nigeria. In the month of september, the central bank of nigeria cbn or the bank has played an active role in the nigerian financial markets by issuing various circulars, guidelines and regulations that impact on, amongst others, financial institutions, electronic transactions as well as the cashless policy, for the overall. The effectiveness and challenges of the cbn cashless. The central bank of nigeria cbn in a circular released in 20 states that of the 84.
The cbn cashless policy effective from june 1, 2012 stipulates a daily cumulative limit of n500,000 and n3 million on cash withdrawals and lodgements by individual and corporate bodies respectively free of processing fees or. Cashless nigeria is a policy established in the year 2012 by the central bank of nigeria to curb excesses in the handling of cash in the nigerian federation. Media communication, to complement existing cbn s and bankers committees media campaign. The central bank of nigeria cbn introduced cashless policy in april 2011 with the objective of promoting the use of electronic payment channels instead of cash. Media communication, to complement existing cbns and bankers committees media campaign. One of the prerequisite for the development of national economy according to ajayi and ojo 2006 is to encourage a payment system. A study on the acceptance and adoption of the cbn cashless. Monetary policy role, the financial stability role and the overall economic role cbn, 2011. The cbn cash policy stipulates a daily cumulative limit of n150, 000 and n1, 000,000 on free cash withdrawals and lodgments by individual and corporate.
This study is to investigate the effects, challenges and prospects of cashless policy on the nigerian economy. The central bank of nigeria introduced cashless policy initiative to accomplish two main macrosocioeconomic policy objectives of increased convenience and greater financial inclusion in. Charges for cash deposit by individuals are as follows. In our original discussion of the 150k limit, most nairalanders strongly condemned the cbn for what they saw as a heavyhanded policy that was not well thought out at all and would lead to unnecessary hardship and people keeping more cash at home the reason given, promoting epayment was criticized because there are much better ways to promote epayment without. The cashless economy policy initiative of the central bank of nigeria cbn is a move to improve the financial terrain but in the long run sustainability of the policy will be a function of endorsement and compliance by endusers ejiro, 2012.
Mixed reactions have continued to trail the cashless policy introduced by the. To drive development and modernisation of the countrys payment system in line. The impact of the cbn cashless policy on the development of the banking sector of nigeria, largest undergraduate projects repository, research works and materials. Highlights from recent circulars issued by the central bank of nigeria december 11, 2019 in nigeria by quintin coetzee this information. The policy, introduced by the cbn in april 2011, states that individual and corporate customers are restricted to a daily cash withdrawal and lodgment of n500000 and n3m respectively. The cashless policy started with pilot programmes in lagos, january 1st 2012 and a rollout across the country was substituted with phased.
Cashless policy and contradictory fiscal policies punch. This study titled central bank of nigeria cashless policy and nigeria economy a study of cbn enugu intends to drive development and modernization our payment system in line with nigerias vision 2020. The cashless policy was introduced by central bank of nigeria cbn in 2008 and ogun state government started working on the policy very early in 2011 while the implementation by banks in ogun state was effected on september 1, 20 as directed by the cbn. Cashless policy could often be affected by physical challenges such as high rate of illiteracy, inadequate sensitizationeducation of the benefits of cashless policy, and inadequate logistics such as the provision of internet connections in commercial areas, computers and point on sale pos machines. A cashless economy simply illustrates a gradual or a radical movement of the entire. Effect of cashless monetary policy on nigerian banking. The cashless economy policy initiative of the central bank of nigeria cbn is a move to improve the financial terrain but in the long run sustainability of the policy. The central bank of nigeria cbn has introduced a new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals or cash deposits that exceed n500,000 for individuals and n3,000,000 for corporate bodies. The impact of central bank of nigeria cashless policy in. Recently, the cbn came out with two laudable agenda the islamic banking noninterest banking and the cashless economyepayment systembabalola. Pdf impact of cashless economy in nigeria researchgate. Highlights from recent circulars issued by the central.
Engagement of key banks customers and other stakeholders. The results revealed that cashless economic policy positively. The policy was introduced by central bank of nigeria cbn in december 2011 and was. Pdf effects of cashless economy policy on national development. Recently, the cbn came out with two laudable agenda the islamic banking non interest banking and the cashless economyepayment systembabalola. Pdf prior to this time, nigeria economy was largely described as cash.
Jimoh from the cbns banking and payments system department provided insights into policy. Under the cashless policy, cbn says the payment of depositwithdrawal charge is a choice by individuals and businesses. In nigeria, the central bank of nigeria cbn announced its cashless2 policy in 2011 and commenced a pilot of the policy in lagos state in april 2012. The apex bank said it made the decision during the 493rd bankers committee meeting, which held on february 8th in lagos. The central bank of nigerias cashless policy in nigeria. Financial inclusion is thus distinct component of the cbns second cashless policy objective, in conjunction with reducing banks cost to serve.