Barely two years after the horrible pain of not being able to access cash from deposit money banks due to the Naira redesign policy initiated by the Central Bank of Nigeria in 2022, Nigerians are in for a similar experience this time for no reasonable reason.
It all began sometime in September when banks’ customers across the country started complaining of financial glitches while using their electronic apps. Many customers complain of failed transfers, undelivered transfers despite money being deducted among other uncompleted transactions.
To some customers the most disappointing side of such transactions was the fact that some banks still went ahead to deduct transaction fees even when such transactions failed.
Sharing his experience of an incident, an Abuja-based businessman, Michael Akpata, said he lost a large sum of money in a time constraint purchase due to his bank’s inability to complete a payment transaction which led to his losing out of the deal.
“On September 15, 2024 I made payment for a supply of goods worth N25 million using my banking app as usual which confirmed that the transaction was successful.
“But later that same day when I sent my driver and my company admin manager to go collect the goods, they called me to say they were denied access to the company as my payment could not be confirmed from their bank.
“I have to call my account manager in the bank who told me that they were having technical challenges but assured me that it will sail through. Unfortunately, that didn’t happen and as I speak with you I have gone to the bank to physically complain twice but nothing concrete has been done.
“I lost the goods I paid for, my money is still hanging and I am here waiting for both banks to resolve the issue so I can at least retrieve my money”
“I lost the goods I paid for, my money is still hanging and I am here waiting for both banks to resolve the issue so I can at least retrieve my money.
“These are some of the horrible experiences you get from the operators of our financial system,” he said.
He added that the most unfortunate part is the industry regulator, the CBN, which seems not to help matters.
According to Akpata, he has in the last six months reported to two different banks where his company has accounts to the CBN via writing but got no response.
“What is the use of the CBN asking banks’ customers who have complaints to report through designated phone numbers or emails when they know that they will not act?
“You see, because of such experience and considering the fact that as a businessman time is of essence in transactions, I choose now to sort things out with the banks myself but this too is not an easy task.”
Unfortunately, Akpata’s case is just one in a million as a visit to any of CBN’s social media channels revealed tons of failed transaction complaints against DMBs and other financial institutions operating in the country’s financial ecosystem.
Depositors’ nightmare
While electronic financial transactions have become an issue of concern to Nigerians, getting cash from the deposit money banks is not any better.
For instance, a visit to some deposit money banks in the Federal Capital Territory to assess the situation on ground shows that customers are having a nightmare trying to withdraw cash from banks.
Banks have increased their maximum over-the-counter withdrawal limit to N50, 000 per day.
According to investigations by our correspondent who visited some banks in parts of the city from the Jabi axis to the Central Business District through Maitama, to Garki, App, Asokoro to the satellite towns of Bwari, Gwagwalada to Kuje down to Kwali, it was revealed that Automated Teller Machines were almost non functional as a good number are unable to dispense cash.
However, a few banks in the city which dispensed cash via their ATMs, rationed the amount allowed to be withdrawn. Among most banks visited it was observed that customers were allowed to withdraw N20,000 per day, while customers of other banks using their facilities were allowed to withdraw a maximum of N5,000 per day.
At the Jabi branch of First Bank, Guaranty Trust Bank and Zenith Bank visited last Thursday The Point, it was observed that customers were allowed to withdraw N5, 000 daily.
The situation was not different at the CBD.
A customer of one of the banks in Kuje, Austin Ejofor, who spoke with The Point said, the situation was worse off some few weeks ago, “Almost all the ATMs in the banks in the town were not dispensing cash some few weeks ago.
“Perhaps, due to the recent threat from the Central Bank of Nigeria they (the Banks) took some steps to ration, hence a good number of banks have increased the withdrawal limit, increasing it from N5,000 that was allowed to customers last month,” he added.
“How do you expect me to go buy cash from sources outside the banks, pay charges on top and think I would not transfer such to my customers?”
At the GTBank branch located along the airport road, customers were allowed to withdraw N50, 000 over the counter but a limit of N20, 000 at its ATMs.
An official who spoke to The Point said the bank is now in possession of more cash and that is the reason why the limit was increased.
“We now have more cash and that is why we are giving out more money. Simple,” he said.
The CBN had warned banks and other financial institutions late last month that it will sanction banks that refuse to dispense cash through ATMs.
In a statement, the apex bank said, “Effective December 1, 2024, customers are encouraged to report any difficulties withdrawing cash from bank branches or ATMs directly to the CBN through designated phone numbers and email addresses for their respective states.
Guidelines will be distributed widely to raise public awareness.
“To further enhance confidence in the payment system, our Payment System Vision 2025 initiative will drive initiatives to encourage quick and affordable cross-border payments, a critical step toward unlocking trade, investment, and economic growth.”
Although, a check through the CBN’s social media hands shows that Nigeria’s have continued on a daily basis to report wrongdoings of banks, the apex bank has not shown any seriousness in dealing with such reports.
Raising trend of cash sales
Meanwhile, operators of Point of Sales (POS) are having a field day as they have started increasing charges for withdrawal, even as they allow customers to withdraw as much as they want as long as they can pay the charges.
Currently, POS operators charge N800 for a withdrawal of N20, 000 and N2, 000 for a withdrawal of N50, 000.
An operator, Joseph Idah, said the problem is with the banks as they (banks) have failed to increase the supply of cash, stressing that even they have to go to buy cash from other sources such as petrol stations, markets so as to have enough cash to meet the customers’ demands.
“If the banks increase the volume of cash, they supply such that we can depend on them, you can be assured that we would reduce service charges.
“How do you expect me to go buy cash from sources outside the banks, pay charges on top and think I would not transfer such to my customers?
“How do you expect me to reduce my charges because the banks are giving a maximum of N50, 000 and that cannot meet my customer’s demand? I have to source for cash to remain in business.
“And that simply means that I will have to transfer the cost to my customers.”
Narrating a terrible experience of purchasing cash through PoS operators, Willson Ochie, a federal civil servant said his cooperative society has to pay out close to N50, 000 extra to be able to complete purchase of a cow in Jari Market along Abuja Kaduna Road last week.
According to him, four members of the cooperative society were sent to the market to purchase a cow and after making a choice and agreement of the price of the cow, payment became an issue when the Fulani traders insisted on collecting cash.
“Unfortunately, none of us thought we had to get cash for a transaction as high as N650, 000. We persuaded them to allow us to transfer but they refused. We have to go looking for PoS operators that can give us such cash.
“After about an hour of searching, we finally met an operator who just got delivery of some cash who said he charges N10,000 for every N100,000 cash, by implication we will have to part with N65,000 extra for us to be able to seal our purchase. It took the intervention of the Fulani men from whom we made the purchase for the PoS operator to accept N50, 000.”
Speaking further, he stated that he did not blame the traders for refusing to accept transfers as there have been cases of such transfers that failed. He added that when that happens, the seller of the commodity will be the loser.
He noted that his experience is not different from that of most other traders who go into rural areas to purchase agricultural products. He expressed worries that with the rising cost of accessing cash for such transactions, the cost of foods will continue to increase.
National Assembly worried over cash crunch
Members of the House of Representatives last week expressed concern over the development, urging the CBN to rise to the situation in order to reduce the hardship it is causing citizens especially during this festive season when Nigerians are expected to travel to the hinterlands for holidays.
Introducing a motion under Matters of Urgent Public Importance last Wednesday, Uguru Emmanuel, highlighted the severe economic and social consequences of cash scarcity, which he noted has left many Nigerians unable to access funds even for necessities.
Emmanuel stated that while economic growth heavily relies on consumer spending and business investment, the ongoing cash shortage has become a major impediment to these activities.
The lawmaker recalled that the CBN in its December 21, 2022 policy directive set cash withdrawal limits of N500,000 for individuals and N5 million for corporate entities.
However, he observed that commercial banks have largely disregarded this policy, often limiting cash withdrawals to as little as N10, 000 or nothing at all.
“Entrepreneurs and individuals are subjected to long queues, sometimes spending days at banks without success. This situation has particularly affected rural dwellers that rely on cash for transactions and lack access to digital payment systems,” Emmanuel lamented.
He further raised alarm over the apparent disconnect between commercial banks and point-of-sale (POS) operators, who seem to have unlimited access to cash and often sell it at exorbitant rates.
“Where do the POS operators get their cash from while banks remain dry?” he queried.
The lawmaker warned that unless the CBN takes immediate action, the situation could worsen, especially with the approach of the festive season, leaving businesses frustrated and citizens plunged into deeper economic hardship.
In its resolution, the House mandated the Committee on Banking Regulations to investigate the cash crunch in commercial banks and report back within one week.
The House directed the CBN to urgently address the cash scarcity if it is not responsible for the shortage.
However, recent spot checks conducted by the Central Bank of Nigeria on Deposit Money Banks have shown that much of the cash supplied to the banks goes to VIP customers, leaving the majority of customers with too little to meet their demand.
The apex bank is said to have been alarmed by the discovery that the DMBs are prioritising the interest of their VIP customers in cash disbursements over ordinary customers.
Sources said that the CBN is now poised to sanction, in the coming days, any bank found guilty of this malpractice.
That is aside the N150 million penalties it plans to impose on any bank branch found engaging in illegal flow of freshly minted naira notes to currency hawkers and unscrupulous agents.
A CBN source in Abuja said that the spot checks on DMBs uncovered widespread preferential treatment for VIP customers, with cash hoarded for their use, while regular customers face difficulty accessing funds across the counters and at automated teller machines.
As part of its corrective measures, the CBN has issued a directive mandating DMBs to ensure equitable cash disbursement over-the-counter and through ATMs.
The apex bank said it would intensify its oversight to enforce compliance, warning that severe sanctions await banks found conniving with Point-of-Sale (PoS) operators to restrict cash flow to ordinary customers.
To aid its enforcement efforts, the CBN has urged members of the public who experience difficulty accessing cash at DMBs or ATMs to report such incidents using designated channels.
The public is advised to provide the following details when filing complaints about inaccessible cash at DMB branches or ATMs: Account name/Name of the DMB/Amount involved and Time and Date of the incident.
It said complaints can be submitted via the phone numbers of CBN branches located in the state where the incident occurred or by email through the contact details listed on the CBN website for each state.
The CBN noted that public feedback is critical to identifying and addressing the bottlenecks hindering cash availability.
This intervention forms part of its broader strategy to enhance currency circulation and ensure fair treatment for all bank customers.
According to the CBN official, “the apex bank’s commitment to equitable cash distribution aligns with its role as a regulator to safeguard the financial system and maintain public trust in the banking sector.”
The public is encouraged to remain vigilant and promptly report any irregularities, as the CBN works to restore confidence and fairness in Nigeria’s cash distribution system.
With Christmas and New Year festivities fast approaching, Nigerians need more cash to do their shopping. Accessing cash across the counters and at ATM outlets continues to be a problem.
The banks are rationing cash for customers as they contend with scarcity of naira notes.
Customers of some commercial banks in Ajose Adeogun, Victoria Island, Lagos branches of banks complained that the lenders were not meeting their cash needs.
But the story is different with POS operators who have ready cash to dispense to customers.
While Nigerians await CBN’s efforts to address the challenging situation, it is obvious that those intending to travel across the country during this holiday season would have to pay more especially when they have to use cash for such transactions.
