- The CBN cash policy stipulates a daily cumulative limit of N500, 000 and N3, 000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively in the Lagos State with effect from March 30, 2012. Individuals and corporate organizations that make cash transactions above the limits will be charged a service fee for amounts above the cumulative limits.
- Furthermore, 3rd party cheques above N150, 000 shall not be eligible for encashment over the counter with effect from March 30, 2012. Value for such cheques shall be received through the clearing house.
- Banks will discontinue cash in transit lodgment services rendered to merchant-customers with effect from January 1, 2012.
What is the CBN cash policy?
Does the cash policy mean there will not be cash in circulation or people are not allowed to use cash?
No. There will still be cash in circulation. The cash policy aims at reducing the usage of cash and increasing the use of alternatives to cash due to the negative consequences of cash usage.
Does the cash policy mean, a customer of a bank will be denied access to his money? Are there any restrictions on the amount of cash customers can pay in or withdraw? As an account holder can I withdraw more than N150, 000 over the counter?
- No. The cash policy allows you to use any amount of money from your account electronically. However, if you wish to withdraw cash above the daily free cumulative limit of N500, 000 and N3 million for Individuals and corporate organizations respectively, you will be charged a service fee on amounts above the cumulative limits with effect from March 30, 2012.
- The policy does not restrict the amount of cash that an individual can withdraw or deposit. It only says that they will have to pay service fees on the excess cash.
When is the cash policy taking effect?
- The cash policy takes effect on January 1, 2012 in Lagos as pilot
- Nationwide implementation of the policy will commence from June 1, 2012
When will the charges begin?
The charges on cash deposit/withdrawal above the set limit will begin FROM March 30, 2012.
Can 3rd party cheques still be cashed over the counter?
3rd party cheques can be cashed over the counter till March 30th 2012.
How much will I be charged when I deposit or withdraw cash above the limit?
You will be charged 3% for individuals and 5% for corporates over the limit withdrawn, while there will be a 2% for individuals and 5% for corporates over the amount deposited.
Will the charges be applied per transaction, daily or monthly?
Charges will be applied daily, since it requires the total daily amounts above the limit.
Is the policy on third party cheques immediate or it will take effect from march?
The policy takes immediate effect. However, Banks are encouraged to accommodate their customers and educate them that from March there will be no accommodation.
If I withdraw N600, 000 which is above the limit how will I be charged?
You will be charged the processing fee on N3,000.00 ONLY
Can I issue multiple cheques of N150,000 each on the same day and not breach the policy.
No. The limit is on daily cumulative cash withdrawal/deposit AND NOT per withdrawal. So, if the cheques are going to be lodged into an account is allowed; but if the cheques are for withdrawals you breach the policy.
Will a signatory to a corporate account be allowed to withdraw on the corporate account over N150,000 since he is one person?
If a representative and signatory to a corporate account present a cheque on behalf of his company, it is considered a corporate withdrawal and he can cash up to N3, 000,000 cumulatively on that account.
Can I withdraw more than once but not exceeding 150,000 each?
Yes, you can withdraw more than once and NOT breach the policy provided your cumulative withdrawals per day do not exceed N500,000 for individual and N3,000,000 for corporates.
Are we going to be reported for depositing or withdrawing more than stipulated limits?
There will be no reports on individuals or corporates that exceed the limits. It is not illegal to exceed the limits; it is just that there will be a processing charge applied.
Why is CBN introducing the cash policy? What are the benefits of the new policy?
- To enable the achievement of the nation’s vision 2020 objective
- To reduce huge cost associated with cash handling (printing, storing, processing, distributing, etc)
- To reduce risk of robbery
- To increase convenience/access to payment (more payment options)
- To enable more transparency in payment systems, and allow for more effective monetary policy
- Reduce cash-related crimes for safety of bank customers and the general public.
What are the alternatives to cash payments?
- Any of the under listed channels can be used for electronic transactions instead of cash;
- Point-of-sale (POS) terminals
- Mobile payment system
- Internet banking
- Multi-functional ATM
- Electronic Funds Transfer Systems
- Direct debit for regular in nature bills payment
How do I begin to use any of the alternative payment channels?
- You can go to your bank and make enquiry on any of the channels, you will be guided accordingly.
- The CBN also licensed 11 mobile payment operator to roll out mobile payments
Must I use all the alternative payment channels?
- You can use any one that suits your need
- You can equally use more than one or all depending on your needs, but it is not a must for you to use all.
How do I get a POS as a merchant and what does it cost me to have it? Is there any charge on the amount spent by a customer in my shop?
- If you ask your bank they will give you a POS terminal, most likely free of charge depending on your transaction volumes.
- You will only be paying 1.25% of the transaction (amount spent by customer) subject to a maximum of N2000 per transaction
What is the cost of POS?
The industry has endorsed four manufacturers for supply of Point-of-Sale terminals - PAX, Bitel, Ingenico, and Verifone - with negotiated discounts and local support arrangements. A PoS can be purchased from any of these four for as low as N45k per terminal. However, parties are free to purchase PoS terminals from any manufacturer, so far they meet the PoS specifications in the Point-of-Sale guidelines.
How will it benefit me?
It saves you from robbery, theft, cost of cash management, hassles of counting cash, looking for change, getting more customers that do not have cash but card, access to more revenue from value added services of POS such as bills
What do I need to know about accessing RSA Balance for payment of Equity Contribution
Q. What is the objective of the pension-backed mortgage?
A. This guideline was developed by the National Pension Commission (PenCom) to enable Retirement Savings Account (RSA) holders access part of their RSA balance and use it as an equity contribution toward securing a residential mortgage. It is also focused on bridging the deficit in housing as well as improving the standards of living of RSA holders by facilitating their ownership of residential homes during their working life.
Q. How much can I access to serve as my equity contribution for mortgage?
A. The maximum amount to be withdrawn for equity contribution for the residential mortgage should not be more than 25% of the total RSA balance as of the date of application, irrespective of the percentage of equity contribution required by the mortgage provider. Where 25% of the RSA balance is more than the required equity contribution, the RSA holder can only access an amount equivalent to the equity contribution required by the mortgage providers. Where the 25% is less than the equity required, the RSA holder must have deposited the difference with the mortgage lender with evidence before applying for the 25%.
DOWNLOAD FULL FAQ ON ACCESSING RSA BALANCE FOR PAYMENT OF EQUITY CONTRIBUTION