Bank Inspectors support cashless economy

Bank Inspectors support cashless economy, train stakeholders

To support the cashless economy initiative of the Central Bank of Nigeria (CBN), the Committee of Chief Inspectors of Banks in Nigeria (CCIBN), organised a three-day trainingprogramme for banks, discount houses, external auditors and law enforcementagencies in Lagos. The training programme, which held from November 16-18, was aimedat adequately acquainting participants with the dynamics of the cashlesseconomy initiative, ahead of its commencement in pilot phase in Lagos State by January2012. 

Abas Alhasssan, 2nd Vice Chairman, Committee of Chief Inspectors of Banks(CCIBN), said the cashless economy initiative is a grey area in this part ofthe world. “It is however a welcome development, making it imperative for ChiefInspectors of Banks to  equip themselvesas well as other stakeholders for the challenges ahead of the pilot scheme inLagos State. At the end of the training, we expect participants to have very goodunderstanding of cashless payments, regulatory perspectives, fraud and internalcontrol requirements, among other issues.”

Speaking on the initiative, Chidi Umeano of Shared Services Office, Central Bank of Nigeria(CBN), said it will enable the apex bank achieve about 30 percent reduction inthe cost of funds being passed by banks to customers. “The cashless economyinitiative has tremendous benefits for the people and the economy. It would reducethe cost of cash handling and cost of funds, with available statistics showingthat the Central Bank and the banks would have spent over N200bn on cashmanagement by 2012. This cost can be ploughed into infrastructure development. Itwould also mean that majority of Nigerians would stop subsidizing the cashhandling cost of heavy cash users.”

He added that “availablestatistics show that 10 percent of branch transactions in Nigeria are aboveN150,000, but they make up about 77 percent of the value of cash transactionsin the country’s financial system. The initiative will also usher in an era of convenientand secure payment systems.”

It would berecalled that the CBN in a circular released early this year to all banks,Cash-in-Transit (CIT) operating firms, payments system service providers, aswell as money card acquirers, issuers and processors increased penalties forcash transactions by individual and corporate bank account holders to helpreduce the high usage of cash as well as moderate the cost of cash managementamong operators in the country’s financial system.

Since therelease of the circular, the Central Bank has embarked on public enlightenmentthrough seminars and media campaigns.