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Customers, PoS Operators, Companies Panic As CBN Slashes Withdrawal Limits

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The Central Bank of Nigeria has imposed fresh cash withdrawal limits on individuals and organisations, which will become effective on January 9, 2023.

According to a memo issued by the CBN to banks on Tuesday, individuals will only be able to withdraw N100,000 per week (from over-the-counter, point-of-sale machines or automated teller machines), while organisations can access N500,000 per week.

The memo signed by the CBN’s Director of Banking Supervision, Haruna Mustafa, directed banks to load only N200 and lower denominations into their ATMs. This means Nigerians will only be able to withdraw N20,000 per day from ATMs when the directive becomes effective.

The memo read, “The maximum cash withdrawal over the counter by individuals and corporate organisations per week shall henceforth be N100,000 and N500,000 respectively. Withdrawals above these limits shall attract processing fees of 5 per and 10 per, respectively.

“Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.

“The maximum cash withdrawal per week via Automated Teller Machine shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day. Only denominations of N200 and below shall be loaded into the ATMs. The maximum cash withdrawal via the point of sale terminal shall be N20,000 daily.”

However, there is an exemption that allows up to N5m for individuals and N10m for corporate organisations once a month with certain requirements.

The CBN warned banks that any bank that would aid and abet the circumvention of this policy will attract severe sanctions.

PoS operators kick

Following the new directive, the National President, Association of Mobile Money and Bank Agents of Nigeria, Victor Olojo, has said that point-of-sale operators would plan to protest as the policy was targeted at killing their source of livelihood.

Olojo said that the newly announced policy would have a negative impact on their business as it translated to the shutting down of PoS terminals.

He said, “This news is just breaking and a lot of PoS agents are already complaining bitterly. Some are calling for protests as this policy, which limits PoS transactions to N20,000, sends them out of business. Hence they have to return to their villages.”

Speaking on the impact of the new policy on individuals and the economy, the president said it would be really tough as Nigeria was still a cash-dominant society.

He said, “Nigerians should brace up, as this is a challenge that CBN is putting out to Nigerians to embrace technology. However, the difficulty would be felt as we still have a lot of transactions done with cash, especially those that are below the pyramid such as the market women and men who are petty traders, because this in essence means that once a bag of rice or flour is to be bought, which is above N20,000, it has to be via e-banking. Looking at it, how many of these people are technology-savvy?

“The CBN wants to achieve an agenda which is not exactly bad. However, a longer notice should have been given to those at the bottom of the pyramid. I believe that, eventually, the adoption would scale and people would have to get acquainted irrespective of the difficulty, embracing it in the long run.

“However, it is still very difficult because the technological infrastructure is still not there yet, and there are those who have had bad experiences with technology as well. The implication of this policy would slow down a lot and affect a lot of things, particularly those earning more than N20,000 daily.”

Olojo noted that his fears and concerns were that the policy was coming at a harsh period when the Nigerian economy was ill-prepared for it. He added that  there should be an adequate alternative before any process would be scrapped.

Also, a PoS operator, simply identified as Christian Onyema said, “The new CBN policy will affect our business because pegging daily transaction limit to N20,000 is not helpful for us. For instance, a customer who wanted to transact business came to withdraw N500,000 today, I made my gains and he was able to do his own business. This will no longer be possible by January when the policy takes effect. The economy will suffer and insecurity will rise too because some operators will definitely go out of jobs.”

Another operator who gave his name only as ‘Small’ said, “This will really affect PoS business, a situation where customers can’t withdraw more than N20,000 daily means those who withdraw more than that normally will be limited.”

Transporters react

The Deputy Managing Director of ABC Transport, Jude Nneji, however, lauded the project.

He said, “At least, it will limit some of these crimes. If somebody knows he can’t get cash from you, he won’t bother to attack you. If you also consider the cost of printing this money, you’ll want to use electronic means.”

When asked if this would not affect his transport business, he said, “No doubt, it’s going to encourage people to hoard funds but for people like us whose customers pay through electronic means, we don’t have a problem. However, we hope that government has good intentions too.”

The Chief Executive Officer, Rivers Link, Mr Obinna, said, “This will affect our business, some of us are businessmen and there may be things you want to buy that will be more than N20,000, and some of us may prefer cash, so it will surely affect businesses.”

Businesses lament

The Lagos State Chairman of the Nigerian Association of Small and Medium Enterprise, Dr Adebayo Adams, said the policy would hit businesses, especially MSMEs.

“If other channels are well-organised, then it is good. However, every other thing is going to affect us because, as from December 15, 2022, most people will be skeptical about accepting old notes.

“Most people will not like to discard old naira notes with them because there is no point in taking away the one I have to the bank and find out the new naira notes are not yet available.

“How can you say I can’t access more than N100,000 in a week? What do I do with N100,000? So, it is going to have a serious effect on the local market. These people are selling on a daily basis at Ketu , Igboyi, Oyigbo market, most of them do not have PoS or ATM. So, it will affect the speed of transactions and movement of goods.

“Now, it is people with cash that will be able to buy goods. Because if I say I want to transfer and no one is taking the transfer from me, they will tell you they cannot accept that mode of payment because they have no bank account.

“Now, CBN is talking about N100, 000 a week, but how will that work when a bag of rice is N45,000? So, if I buy a bag of rice, won’t I buy something to eat? It is a very bad policy and will affect every small business owner because they won’t have money for transactional purposes.”

Wrong timing

The President of the Bank Customers Association of Nigeria,  Dr Uju Ogunbunka, said that the cashless policy’s intentions were understandable but the execution and timing were not right, stressing that these were areas where severe problems would emerge.

“From the cashless policy point of view, we should appreciate that, as much as possible, the government is trying to limit the use of cash for transactions, more so, now that they are redesigning the currency. And they may not have enough in print, so for it to go around, they have to find a way to limit us from using cash.

“The second thing is that the government wants to drive the use of online banking, which is good for our economy.  Unfortunately, there have been so many complaints about failed transactions.

“At least, to the best of my knowledge, there is hardly any week without complaints in the banking hall. You will see people shouting with regard to transfer failures. Have we put enough structure to take care of some of these things? The answer is, we are yet to, we are making progress, yes, but we should give enough room and time for some of these things to play out rather than short-circuit the system.

“If all of us, including market women and men, have to go online today, can the infrastructure carry all of us through successfully? This question should be able to deal with some of these things.

“Some of us do not need too much cash to operate. For instance, if I go to the bank in a week and withdraw N100,000, what will I be spending that money on? I mean that should be enough to use for one week. If I can do other transactions online, why not? But it is not everybody that can do this, particularly those who are trading. Most of them still depend on people coming with cash and, then, they will carry the cash to the bank to pay in. This means there will still be a need for people to have cash; otherwise, what we are going to tell people is that you have to hold on till you have cash to do your transaction if you cannot do online banking.

“And the aforementioned can stall businesses. For example, the market woman going to buy food stuffs needs physical cash. Where will she  do online banking with that? And can N20,000 today solve that problem for one week for a family? That’s not possible, so there might be a need for a rethink unless you are targeting people in the towns.

“Even in towns, I do not see the effectiveness of this policy let alone in the rural environs. It is a good policy, but we should streamline to see what is possible in the kind of economy we operate, especially with inflation at double- digit. The practical situation on ground does not support this policy.”

Good policy

A former President of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, said that the CBN, in limiting withdrawals, was trying to reduce cash in circulation and drive financial inclusion, which was not a bad thing to do.

He said, “They are trying to limit cash in circulation so that people will have little cash. I think they are trying to drive financial inclusion with the policy.”

Nzekwe also said that with more money in the banks, the institutions would be able to provide financial interventions to those who needed it to boost the economy.

“With more money in banks, the banks can use the money for their financial intervention role in the economy,” he said,

He, however, urged the banks to ensure that Nigerians could trust their systems enough to keep their money there.

He noted the issue of people losing money in their bank accounts to cyber-attacks and fraudsters could discourage them from keeping money in banks.

Nzekwe urged the banks to address this issue and build more trust with Nigerians to drive financial inclusion and security in the country.

Credit: The Punch

BIG STORY

Court Restrains CBN From Extending Deadline On Use Of Old Naira Notes

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A federal capital territory (FCT) high court has compelled the Central Bank of Nigeria (CBN) to go ahead with the full implementation of the naira redesign policy.

Delivering a ruling on Monday in a suit marked FCT/HC/CV/2234/2023, the court restrained the CBN from extending the deadline on the use of old naira notes.

The CBN, President Muhammadu Buhari, and several banks were included as defendants in the suit.

Eleojo Enenche, the judge of the FCT high court, ordered the CBN not to extend the deadline pending the determination of the suit.

“An order of interim injunction is hereby made restraining the defendants whether by themselves, staff, agents, officers, interfacing banks or whosoever not to suspend, stop, extend, vary or interfere with the extant termination date of use of the old N200, N500, and N1000 bank note being 10th day of February 2023, pending the hearing and determination of the motion on notice,” the court held.

The judge also made an order of interim injunction “directing and mandating the defendants whether by themselves, staff, agents, officers, interfacing banks or whosoever described to comply with, implement and give effect to the currency redesign and restructuring of the old N200, N500, and N1000 bank note on or before the last day of 10th of February, 2023, pending the hearing and determination of the motion on notice”.

The court further directed the bank heads, chief executive officers, managing directors, and/or alter egos “to forthwith show cause as to why they shall not be arrested and prosecuted for the economic and financial sabotage of the Federal Republic of Nigeria by their illegal act of hoarding, withholding, nor paying or disbursing the new N200, N500, and N1000 bank note, being the legal tender of the federal republic of Nigeria to their respective customers, despite supplies of each such currency note by the 2nd and 3rd defendants, thereby leading to the present scarcity of currency notes in circulation”.

The order will be for an initial period of seven days until the motion of notice is heard on February 14.

The plaintiffs are Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM), and National Rescue Movement (NRM).

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JUST IN: Court Jails Fidelity Bank MD, Onyeali-Ikpe, Bank’s Secretary

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A Chief Magistrate Court at Ogba, Lagos on Monday morning sentenced the Managing Director of Fidelity Bank, Nneka Chinwe Onyeali-Ikpe to six weeks imprisonment over disobedience of a garnishee order of court restraining the bank from allowing a judgment debtor access to his account.

Joined with the Managing Director to serve the imprisonment is the Company Secretary of the bank, Ezinwa Unuigboje.

Magistrate Lateef Owolabi gave the sentence sequel to a garnishee order he gave on December 6, 2022 asking 16 banks not to allow a judgment debtor, Prince Enabulele Ozaze access to his bank accounts pending the payment of N2.8 million judgment debt in suit involving the sale of a Toyota Corolla car.

In the main suit, Magistrate Owolabi had given judgment on October 13, 2022 in favour of the plaintiff, Jibrin Ahmed who sued the defendant over the payment of N2.8 million he made to the defendant for the purchase of a Toyota Corolla car. Magistrate Owolabi in the judgment said that the claim before the court is summons used in action for debt or liquidated money demand with or without interest. Liquidated demand, according to him, is one ascertainable as a matter of arithmetic precision without further investigation.

He then said: “I have examined the whole process filed by the claimant and hold that the claimant is entitled to judgment not necessarily because the defendant is absent, but because the claimant has made a case worthy of being entitled to judgment. The totalities of evidence presented are relevant and reliable”.

There magistrate thereafter entered judgment against the defendant in the sum of N2.8 million which is due to the claimant over the transaction that took place in July 2022.

In order to reap the fruit of the judgment, the claimant’s lawyer, Alayo Akanbi filed a garnishe proceeding before the court and attached 17 banks, and asked the court to stop the banks from allowing the defendant to draw money from his accounts with them pending the liquidation of the debt. The garnishe order was granted on December 6, 2022.

However, on January 25, 2023, the claimant, now judgment creditor deposed to an affidavit before the court where he showed that the garnishe order have been flouted by Fidelity bank. He showed instances of how the judgment debtor had been withdrawing funds from his account to the extent that he had depleted the funds in his account with Fidelity bank. He claimed that the judgment debtor has N3, 165, 759.05k in his account with Fidelity bank as at January 12, 2023 when the garnishe order was served on the bank.

By January 15, three days after service, the judgment debtor had withdrawn N725,547.80k from the account. The following day, January 16, 2023, another N251,305.90 was transferred out of the bank. On January 17, the legal officer of the bank Obianuju Nwosu confirmed service on the bank as at December 22, 2022 and further apologized for the transactions on the account.

On January 18, 2023, the court ordered that ordered that the Managing Director, and Company Secretary to appear in person before the court to explain why they should not be committed to prison for allowing the judgment debtor to dissipate the funds in his account after the service of the garnishe order nisi.

At proceeding on Monday February 6, the Managing Director and Company were not in court as ordered. Lawyer to the judgment creditor told the court how the two had disobeyed the garnishe order of the court.

Magistrate Owolabi in his ruling sentenced the Managing Director and Company Secretary to six weeks imprisonment each. He further ordered Lagos State Commissioner of Police and any officer under his command to arrest the duo, bring them to court for onward transfer to the appropriate correctional center.

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JUST IN: EFCC Chairman, Bawa Sent To Prison For Disobeying Court Order

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The Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, has been committed to prison for disobeying court order.

The court also directed the Inspector-General of Police (IGP), Baba Usman Alkali, to effect Bawa’s arrest and remand him in Kuje prison for the next 14 days until he purges himself of the contempt.

Justice R.O. Ayoola of the Kogi State High Court, in his judgement on Monday, granted the application for committal to prison of the EFCC chairman for disobeying a court ruling delivered on November 30, 2022, wherein the EFCC chairman was directed to produce the applicant in the case, Ali Bello.

Ali Bello had dragged Bawa to court for arresting and detaining him illegally, with the court ruling in his favour, only for the EFCC to arraign him for alleged money laundering three days after the ruling.

The EFCC’s applications for setting aside and stay of execution of the ruling were refused for want of merit.

The Court had, in Form 49, Order IX, Rule 13, marked: “HCL/697M/2022” and titled: “Notice to Show Cause Why Order of Committal Should not be Made,” asked the EFCC Chairman to appear before it on January 18, 2022 to explain why he should not be jailed for flouting the order given on December 12, 2022 in a case filed by Ali Bello against EFCC and Bawa, as the 1st and 2nd respondents, respectively.

The court ordered that EFCC and Bawa be served the motion of notice together with Form 49 by substituted means.

The court had declared the arrest and detention of the applicant in the face of a subsisting court order made by a court of competent jurisdiction and without a warrant of arrest “or being informed of the offence for which he was arrested” as unlawful, unconstitutional, and in contravention of the personal liberty and dignity of human person guaranteed under Chapter IV of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

The court had also ordered the respondents to tender an apology to the applicant in a national newspaper and awarded N10 million compensation for him.

The Form 49, issued on December 15, 2022, and addressed to Bawa read, “Take notice that the Applicant will on the 18th day of January, 2023 at the hour of 9 o clock in the forenoon or so soon thereafter, apply to this Court for an order for your committal to prison for having disobeyed the order of this Court made on 12th day of December, 2022 that:

“That arrest and detention of the Applicant on the 29th November, 2022 by the 1st and 2nd Respondents in the face of a subsisting Court Order made by a Court of competent jurisdiction and without a warrant of arrest or being informed of the offence for which he was arrested is unlawful, unconstitutional and contravenes the Applicant’s right to personal liberty and dignity of human person guaranteed under Chapter IV of the Constitution of the Federal Republic of Nigeria 1999 (as amended) and Articles 5 and 6 of the African Charter on Human and Peoples’ Rights.

“Perpetual injunction restraining the Respondents, their agents, servants, privies, or however called from further arrest, detention, harassment and intimidation of the Applicant.

“An order directing the Respondents to tender an apology to the Applicant in any of the National Daily having nationwide coverage for the illegal detention and harassment of the Applicant.

“An Award of the sum of Ten Million Naira as general damages jointly and severally against the Respondents for the unlawful detention and harassment of the Applicant.”

This followed an application by Counsel to Ali Bello, S. A. Abass.

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