Cashless policy: Inter-bank transfers, settlements rise by 27.3%

The cash-lite and e-payment system initiative embarked upon by the Bankers Committee, which is billed to take off next year, has raised the value of inter-bank transfers and settlements by 27.3 per cent to N83.6tn as against the N65.7tn in 2010.Also, the value of cheques has risen by 21.4 per cent in the first nine months to N12.33tn, as against N10.15tn in the corresponding period in 2010.The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said at the end of the year dinner of the Lagos Business School in Lagos that the direct cost of cash management borne by banks was as huge as N114.5bn in 2009, adding that it was projected to increase to a N192bn in 2012, representing an increase of about 68 per cent.Rewane added that this was a cost that the banks would do away with in the electronic payments era, thus making credit and other services of the banks cheaper for customers. Indications had emerged that the banks in the country might reduce their lending rate by 30 per cent as from next year.Our correspondent had gathered from reliable sources in the Bankers Committee that the 24 banks had unanimously endorsed the initiative proposed by the Central Bank of Nigeria to reduce lending rates through a drastic cost-trimming strategy in line with a new payment regime.The source, who craved anonymity because he was not permitted to speak said, ``The bankers at their meeting recently agreed to cut down operating expenses by as much as 30 per cent to make funds accessible to borrowers at a lower cost. The e-payment initiative involves a transformation of the payment system and the idea is to permit banks to cut cost through moving the country from its present cash-and-carry status to one where people will make payments through electronic channels. The Central Bank of Nigeria in the new cash-lite banking regime permits a daily cumulative limit of N150,000 and N1m on free cash withdrawals and lodgements by individuals and corporate customers, respectively. Individuals and corporate organisations that make cash transactions above the limits would be charged a fee of N100 per thousand and N200 per thousand respectively while third party cheques above N150,000 would not be eligible for encashment over the counter and would only be paid through the clearing house.The CBN had earlier said that by eliminating the cash-and-carry status of the banking system for the use of electronic channels, the cost of doing business in the industry would crash and the capacity of the banks for financial intermediation greatly enhanced.
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