CBN set to Kick-off Cashless Policy in 2020, imposes Charges on Deposits

The Central Bank of Nigeria (CBN) has announced that nationwide cashless policy implementation will kick-off on March 31st, 2020. As regards to this, the apex bank has mandated all Deposit Money Banks in a circular to impose charges on deposits across the nation.

CBN’s Cashless Policy will boost digital payments, thereby ensuring swift and seamless payments. This policy is good for the fintech sector, as more individuals are likely to leverage on their services for digital and financial inclusion.

This new charge will be in addition to already existing charges on withdrawals. The newly imposed charges will take effect on the 18th of September 2019. According to the circular, individual accounts will be charged 3% processing fees for withdrawals and 2% processing fees for deposits of over N500,000.

Corporate accounts, however, will be charged a 5% processing fees for withdrawals and 2% processing fees for deposits above N3,000,000.

The circular further disclosed that new charges will only be applied in Lagos, Ogun, Kano, Abia, Anambra, Rivers State, and Abuja.

Still, on the cashless economy agenda, the CBN announced a process review for merchant settlement by bank customers. The review gives banks the approval to handle merchant settlement amounts. Thereby allowing them to charge applicable taxes and duties on individual transactions.

The CBN’s cashless policy Phase 1 took off in Lagos on the 1st of January 2012. Additional states; Abia, Anambra, Kano, Ogun and Rivers States, as well as Abuja, were added in Phase 2, and it started on October 1, 2013.

The third and final phase of the policy kicked off in June 2019 across 30 states. CBN revealed that the new phase is as a result of the success of the 1st and 2nd phase of the policy and in six pilot states.