Cash scarcity: CBN suspends processing fees on cash deposits.

Cash scarcity: CBN suspends processing fees on cash deposits.

In a bid to alleviate the ongoing cash scarcity crisis in Nigeria, the Central Bank of Nigeria (CBN) has announced the temporary suspension of processing fees on cash deposits exceeding certain thresholds.

This suspension, which takes effect immediately and will remain in place until April 30, 2024, aims to incentivize cash deposits and enhance financial transactions for individuals and businesses.

Previously, individuals were charged a two percent processing fee on cash deposits above N500,000, while corporate entities faced a three percent fee for deposits exceeding N3,000,000.

The directive, signed by Dr. Adetona S. Adedeji, Acting Director of Banking Supervision, mandates all CBN-regulated financial institutions to comply. This means individuals and businesses can now deposit any amount of cash without incurring additional charges.

A CBN official told The Nation that “this measure will address the immediate cash shortage by encouraging the deposit of available cash into the formal banking system. This will increase the liquidity available for withdrawals and economic activity. Additionally, it promotes financial inclusion by making banking services more accessible to individuals who primarily rely on cash transactions.”

However, concerns remain about the potential for fueling inflation and illicit financial activities due to the processing fee suspension. Experts emphasize the need for the CBN to closely monitor the impact of this measure and implement appropriate mitigating measures if necessary.

The Nation has also reliably gathered that to address the current cash crunch in the country, the CBN has started deploying cash from its branches across the country to locations in dire need of cash.

Another CBN official revealed that “efforts are currently being made to move cash to where the scarcity is hardest.”

He reiterated that the CBN has sufficient cash to meet the transaction demands of cash-using members of the public.

He attributed the biting cash crunch to the panic withdrawals of cash by Nigerians ahead of the yuletide to forestall the experience of the last year.

The CBN’s latest directive and action to deploy cash to needy areas demonstrates its commitment to addressing the current cash scarcity crisis while promoting a cashless economy and ensuring a robust and inclusive financial system.

The suspension of processing fees on cash deposits is expected to provide immediate relief to individuals and businesses affected by the cash shortage, boosting economic activity and access to financial services in the short term.