Cbn new cashless policy 2019

The Central Bank of Nigeria (CBN) introduced a new cashless policy in 2019, which aimed to reduce the use of cash transactions and promote electronic payments in the country. Here are some key features of the policy:

Key Features:

  1. Cash Withdrawal Limits: The policy introduced daily cash withdrawal limits for individuals and corporate organizations. For individuals, the limit was set at N500,000 (approximately $1,300) per day, while for corporate organizations, it was set at N3,000,000 (approximately $7,700) per day.
  2. Cashless Policy Zones: The policy designated certain areas as cashless policy zones, where cash transactions would be heavily restricted. These zones included major cities like Lagos, Abuja, and Port Harcourt.
  3. Electronic Payment Channels: The policy encouraged the use of electronic payment channels such as mobile banking, online banking, and card payments.
  4. Penalties for Non-Compliance: The policy introduced penalties for individuals and organizations that failed to comply with the cashless policy. These penalties included fines and imprisonment.
  5. Exemptions: The policy exempted certain transactions from the cashless policy, including transactions related to agriculture, small-scale businesses, and rural areas.

Objectives:

The objectives of the cashless policy were to:

  1. Reduce Cash Transactions: The policy aimed to reduce the use of cash transactions and promote electronic payments.
  2. Increase Financial Inclusion: The policy aimed to increase financial inclusion by making it easier for people to access financial services.
  3. Reduce Corruption: The policy aimed to reduce corruption by reducing the use of cash transactions, which are often associated with corruption.
  4. Boost Economic Growth: The policy aimed to boost economic growth by increasing the use of electronic payments, which are faster and more efficient than cash transactions.

Impact:

The cashless policy has had a significant impact on the Nigerian economy. Some of the key impacts include:

  1. Increased Electronic Payments: The policy has led to an increase in electronic payments, which has reduced the use of cash transactions.
  2. Improved Financial Inclusion: The policy has improved financial inclusion by making it easier for people to access financial services.
  3. Reduced Corruption: The policy has reduced corruption by reducing the use of cash transactions, which are often associated with corruption.
  4. Boosted Economic Growth: The policy has boosted economic growth by increasing the use of electronic payments, which are faster and more efficient than cash transactions.

Challenges:

Despite the positive impacts of the cashless policy, there have been some challenges. Some of the key challenges include:

  1. Resistance to Change: Some individuals and organizations have resisted the change to electronic payments, preferring to stick with cash transactions.
  2. Infrastructure Challenges: The policy has highlighted the need for improved infrastructure, including internet connectivity and electronic payment systems.
  3. Security Concerns: The policy has raised security concerns, including the risk of cyber attacks and data breaches.
  4. Exemptions: The policy has raised concerns about the exemptions, which have created confusion and uncertainty.

Overall, the cashless policy has been a significant step towards reducing the use of cash transactions and promoting electronic payments in Nigeria. While there have been some challenges, the policy has also had a positive impact on the economy and has improved financial inclusion.