CBN Speaks as PoS Operators Consider Hike in Charges, Resort to Naira Buying as Cash Scarcity Bites

CBN Speaks as PoS Operators Consider Hike in Charges, Resort to Naira Buying as Cash Scarcity Bites

  • The Central Bank of Nigerian has blamed commercial banks for the current cash scarcity
  • The apex bank said the development is due to large withdrawals by banks from CBN branches nationwide
  • The scarcity has also led to banks imposing limits on withdrawals and PoS operators raising their charges by 100%

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The Central Bank of Nigeria has said the current cash scarcity is caused by commercial banks making large withdrawals from its branches nationwide.

The development comes as Point of Sale (PoS) operators returned to buying cash from traders and petrol station attendants as banks ran out of money.

PoS charges, Cash scarcity, CBN
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, and a PoS operator Credit: Bloomberg/Contributor
Source: Getty Images

Banks impose withdrawal limits as PoS agents hike charges

Also, commercial banks have imposed withdrawal limits on various ATM points across Nigeria.

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PoS operators said that they have returned to cash-buying following the cash scarcity that is threatening to return like the pre-naira redesign era.

The development has led to operators increasing their transaction charges by 100% from N100 to N200 for cash of N5,000.

A PoS operator in the Iju-Ishaga area of Lagos, Mike Oyewole, told Legit.ng that all the operators in the area have increased their charges as they find it challenging to access cash from normal banking channels.

“I queued at the ATMs at Fagba for over an hour before I could get some cash. Of all the eight ATM points in the area, only four were dispensing.
“We are now patronizing petrol attendants and traders as we did in January and February this year,” Oyewole said.

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CBN blames banks for cash scarcity

BusinessDay reports that banks are struggling to pay cash to customers, citing scarcity.

On November 2, 2023, former Director of Communications at CBN, Isha Abdulmumin, blamed commercial banks for the cash scarcity, saying the apex bank has enough cash to go around.

CBN directed banks to issue and accept old naira notes following a ruling from the apex court.

CBN said:

“For the avoidance of doubt, the Supreme Court ordered that the old versions of N200, N5,000. and N1, 000 banknotes shall continue to be legal tender, alongside the redesigned versions,” Sidi Ali, Hakama, acting director of corporate communications, said in a statement.
“Accordingly, in line with Section 20(5) of the CBN Act 2007, all banknotes issued by the Central Bank of Nigeria will remain legal tender indefinitely.
“Public members are enjoined to continue to accept all Naira banknotes (old or redesigned) for their day-to-day transactions and handle them with the utmost care to safeguard and protect the lifecycle of the banknotes.”

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"Furthermore, the general public is encouraged to embrace alternative modes of payment, such as e-channels, to reduce pressure on using physical cash."

Nigerians hoard cash ahead of Christmas celebrations

Three weeks after the statement, the scarcity has worsened, and queues have returned to various ATM points.

There are also speculations that Nigerians are hoarding cash, fearing the previous December deadline imposed by the Supreme Court regarding the circulation of old N200, N500, and N1000 nots.

The Supreme Court, however, said in a later ruling that the notes should circulate indefinitely.

No More December Deadline: CBN says old naira notes remain legal tender indefinitely, gives reasons

Legit.ng reported that The Central Bank of Nigeria has confirmed that the old naira notes will remain legal tender indefinitely.

This was disclosed in a statement on Tuesday, November 14, 2023, signed by Isa AbdulMumin, Director of Corporate Communications.

Legit.ng had reported in March 2023, that the Supreme Court had extended the deadline to phase out the old naira notes to December 31, 2023.

Source: Legit.ng

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